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GRAIN MARKETS: Crops end lower ahead of March deliveries

Late recovery in soybeans falls short.

Corn, soybean and wheat futures closed lower on Monday with the three wheat markets posting the largest losses.

First-notice day for March deliveries is Tuesday and participants in a Reuters’ survey expect 0 to 200 corn deliveries, 200 to 500 soybeans, 100 to 200 soybean meal, 1,000 to 2,000 soybean oil, 0 to 400 SRW wheat and 0-800 HRW wheat.

Outside markets were uneventful with the Dow Jones industrials up about 20 points when the crops closed, crude up 2 cents a barrel, the dollar was slightly higher after being down earlier, and gold was just 50 cents higher.

Exports – USDA, Reuters:

  • Japan seeks to buy 113,167 metric tons of wheat, of which most will be from the United States. The rest will be from Australia. Results are due on Wednesday. From the U.S. it seeks 36,192 of western white, 24,155 of hard red winter, and 25,070 of dark northern spring. Loading is from April 21 to May 20.
  • After the markets closed, Egypt said it seeks to buy an unspecified amount of wheat from a number of sources including the United States for April 1-10 shipment. Results are due on Tuesday. U.S. wheat has not be competitive in previous tenders.
  • 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.
  • Weekly U.S. export inspections: corn 57.5 million bushels vs 46 million previous week, soybeans 25.9 million vs 40.2 million and wheat 19.8 million vs 21 million.
  • Libya extended the deadline for offers in its wheat, durum and corn tender to the end of March. It

         seeks 100,000 metric tons of wheat, 50,000 of durum and 75,000 of corn for April-May shipment.

Corn closed lower for the third day with March coming to rest under the 20-, 50- and 200-day moving averages.

Lower wheat futures helped pull the corn down, which had already been under pressure as funds appear to be exiting long positions. The CFTC data released on Friday showed funds added 584 to their net long position as of Feb. 21, but the report showed they bailed out of both short and long positions that week.

Strong domestic cash markets, including the Gulf, may limit first-deliveries. Cash basis bids at the Gulf rose 2 to 3 cents in the past week.

The CBOT estimated Monday’s corn volume at 597,596 compared with Friday’s actual volume of 552,303. Open interest in Friday’s open interest decreased by 58,107 with March’s down 81,695 and May’s up 17,704.

March corn closed down 3-3/4 at $3.60-1/4 per bushel and May down 2-1/2 at $3.68-1/4.

What to Look For: River markets remain strong for corn ahead of the river opening in a few weeks on the upper Mississippi River.

Soybeans closed a little lower as a late buying surge failed to end the market in the black. The March remained under key moving averages but within Friday’s higher range.

Funds were noted sellers. Last week’s CFTC report showed funds were net sellers and parred their net long position by 8,625 contracts as of Feb. 21.

Export sales and shipments are falling off as they seasonally do when South American supplies come on line. The weekly export inspections of 25.9 million bushels were down 36% from the prior week. China was again the leading destination.

The CBOT estimated Monday’s volume at 219,249 compared with Friday’s actual volume of 269,139. Friday’s open interest decreased by 25,991 contracts with March’s down 36,575 and May’s up 6,699.

March soybeans closed down 2-1/2 at $10.11 per bushel and May down 2-1/4 at $10.22. New-crop November dropped ¾ to $10.06-1/4.

What to Look For – Gulf basis bids for soybeans dropped 4 to 6 cents in the past week as buyers turn to South America. 

Wheat futures led the crops lower with March soft red winter settling under key moving averages and at a two-week low, while the hard red winter also was at a two-week low but still above the 50- and 100-day averages.                                 

Winter wheat in the southern Plains will be dry this week amid warm weather. The dry conditions have raised concerns about wildfires from Kansas and south.

Funds were sellers of wheat on Monday, but entered the week net long hard red winter and net short SRW. In the CFTC report, funds were net buyers of both hard red winter and soft red winter.

The CBOT estimated Monday’s soft red winter wheat’s volume at 154,156 compared with Friday’s actual volume of 158,984. Friday’s open interest decreased by 31,994 with March’s down 37,593 and May’s up 2,250.

Chicago’s March soft red winter wheat closed down 12-1/2 at $4.18-3/4 per bushel and May down 9-1/4 at $4.38-3/4. Kansas City’s March hard red winter dropped 9-3/4 to $4.44 and May dropped 10 to $4.57. Spring wheat for March dropped 9-3/4 to $5.35 and May slipped 5-1/2 to $5.48-1/4.

What to Look For – Winter wheat will exit winter dormancy soon to put attention on condition reports from the Southern Plains. USDA last week forecast total wheat production this year to be down 20% due in part to the smallest winter wheat acreage in 108 years.  

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