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GRAIN MARKETS: Crops end day, week higher

Fed chairman Yellen says rate hike likely in March.

Corn, soybean and winter wheat futures closed a little higher for the day and week with Friday’s markets helped by Fed Chairman Janet Yellen’s positive comments on the U.S. economy. She also said an interest rate hike was likely at the Fed’s planning meeting on March 14 and15.

While her comments caused brief fluctuations in the markets they were largely expected. By mid-afternoon Wall Street was a little higher and the dollar remained lower.

Crop news was fairly light, which left traders to react to outside markets or balance accounts ahead of the weekend.

Exports – USDA, Reuters:

  • Turkey seeks to buy 130,000 metric tons of EU wheat. Turkey seeks high-quality milling wheat, which is in short supply in Turkey and from Russia. The tender closes March 8.
  • Jordan seeks to buy from optional origins 100,000 metric tons of wheat and 150,000 of feed barley. The deadline is March 7 for wheat tenders and March 8 for barley. The wheat if for July 16-Sept.15 shipment and the barley for July 1-31.
  • Libya extended the deadline for offers in its wheat, durum and corn tender to the end of March. It

         seeks100,000 metric tons of wheat, 50,000 of durum and 75,000 of corn for April-May shipment.

Corn closed higher in light trading with volume-leader May closing above key moving averages but  within the previous day’s range.

Open interest is dropping in March ahead of its expiration in two weeks. Traders are focused on the May, which has had a steady rise in open interest. At the CBOT, 118 deliveries posted against the March.

After the close, the CFTC said funds reduced their net long position in corn by 11,118 contracts during the week ended Feb. 28.

The CBOT estimated Friday’s corn volume at 200,607 compared with Thursday’s actual volume of 249,039. Open interest in Thursday’s lower market increased by 8,020 with March’s down 4,254 at 11,734 and May’s up 4,221 at 658,511.

March corn closed up 2 at $3.74-3/4 per bushel and May up 1-1/4 at $3.80-3/4. New-crop December rose ¾ to $3.99-1/4.

What to Look For: River and Gulf basis bids remain strong for corn ahead of the navigation opening next week on the upper Mississippi River. Traders say export business has been diverted to the Gulf from the PNW where winter storms have delayed grain trains going to those export terminals.

Soybeans finished a fraction higher in light trading and within yesterday’s lower range with the actively traded May contract under the 20- and 50-day moving averages, but higher for the week.

Wire reports this week said a private analyst firm estimated Brazil’s soy crop at 108 million metric tons, which compared with USDA’s current 104 million forecast. The bearishness of that bigger number was countered by reports that rain damage to a key road has slowed deliveries of soybeans to a key Brazil port. That raised concerns in Brazil that the delays may cause buyers to turn to other suppliers.

Asian markets were mixed with China’s soybeans and European rapeseed lower, while Winnipeg canola and Malaysian palm oil rose.

Friday’s CFTC report showed funds reduced their net long position in CBOT soybeans by 22,418 contracts during the week ended Feb. 28. Deliveries on Friday for March soy contracts included 568 soybeans, 253 soymeal and 489 soybean oil.

The CBOT estimated Friday’s volume at 136,886 compared with Thursday’s actual volume of 153,867. Thursday’s open interest decreased by 3,060 in the lower market with March’s down 1,252 at 7,203 and May’s down 4,475 at 345,871.

March soybeans closed up 1/4 at $10.27 per bushel and May inched up ¼ to $10.37-1/2. New-crop November was up ¼ at $10.22.

What to Look For – The Brazil soy harvest is moving along, but attention now is on the shipment delays to ports. More rain is forecast there this week.

Winter wheat futures closed a little higher while spring wheat was 3 to 5 cents lower. Fund buying was noted in the SRW wheat where the May contract settled at the 20-day moving average.

Kansas City HRW for May rose a little to finish above key moving averages, while spring wheat for May dropped to a one-month low and below the 20- and 50-day averages.

A USDA weather forecaster said winter wheat in the Plains will have little or no precipitation the next few days. The 6- to 10-day outlook (March 8-12) also is rain-free for much of the Plains winter wheat.

The weekly CFTC report after the close showed funds added to their net short position in soft red winter wheat as of Feb. 28, while adding to their net long position in hard red winter.

Deliveries against March contracts included 518 for soft red winter and 3 for hard red winter wheat.

The CBOT estimated Friday’s soft red winter wheat’s volume at 81,570 compared with Thursday’s actual volume of 112,265. Thursday’s open interest increased by 2,614 in the lower market with March’s down 290 to 823 and May’s down 327 to 218,261.

Chicago’s March soft red winter wheat closed up 1-3/4 at $4.33-3/4 per bushel and May rose ¾ at $4.53-1/2. Kansas City’s March hard red winter rose 1-3/4 to $4.62 and May rose 1-1/2 to $4.71-3/4. Spring wheat for March dropped 3-1/4 to $5.37 and May fell 5-1/4 to $5.47-3/4.

What to Look For – Winter wheat will exit winter dormancy soon to put attention on condition reports from the Southern Plains.

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