March USDA Supply/Demand report out at 11:00 AM CT today.
Today is the USDA supply/demand crop report at 11:00 a.m. CT with the grain market participants more focused on Brazil’s CONAB production number due out Thursday morning at 6:00 a.m. Today the street wants to see if the USDA will pick up the pace of lowering their expectations of the Brazilian soybean and corn crop to at least on par with the low bar estimates the trade has set for them. Last month, the USDA couldn’t even meet the mild expectations that were set for them. The USDA has been extremely conservative on matching real-world trade estimates of the drought damage done in Brazil to their soybean production.
Overnight trade found wheat futures tumbling again with 85 cent limits in place and wheat nearly trading down that level. At the same time, soybeans pressed higher through the $17.00 range on continued Chinese interest, and Malaysian Palm oil having the single largest daily rally on record, closing at 7,074 RM/MT. Indonesia increased the DMO tax to 30% on March 10 until further notice. The export tax is designed to keep more palm oil in Indonesia’s local economy and out of the world market. Russia will be out with the list of commodities today that will be banned through December 31. Wheat is likely on that list, but keep in mind the current price lift in wheat has priced in no wheat available out of Russia in the 2022/23 wheat crop year. Wheat prices may bounce when the list is released, but it will not be a new surprise.
China is said to be actively securing US soybeans, with additional old crop export sales numbers expected this morning. The US soybeans now are the cheapest in the world, and demand is expected to keep increasing with also a new large US corn export program building. Brazilian corn is offered for export in April/May at $9.60/Bu while the US Gulf is offered at $9.37 and Argentina at$9.18/Bu.
USDA will likely miss the mark on export expectations for corn and soybeans today. Whatever carry out number they release, that number will again be adjusted each month lower going forward to reflect what will be a growing corn and soybean export pace. Corn and soybeans look to still be on track to make price highs in the second quarter, with again May the likely month for price rationing rally highs.
The Russian and Ukraine Foreign ministries are traveling to Turkey for talks given Ukraine said no NATO consideration. This is bringing in widespread liquidation in energies and metals this morning.
South American forecasts have near-normal rain forecasted to drop across Brazilian Ag areas, including needed rain across central Brazil for the winter corn crop. High-pressure ridge continues to hold over E Brazil, which shunts upper air humidity into passing short ways across Argentina/S Brazil. This week, the ridge weakens, allowing rain into central Brazil as the storm systems migrate northward. Lack of extreme heat is forecasted for the late-maturing soybeans and Brazil’s winter corn crops with highs in the 80s to mid-90s. Late planted corn/soybeans are nearing maturity, and the impact of weather is now on the decline. April/May weather for the winter corn crop in Brazil is now the focus. Rain chances are looking optimistic into April.
Live cattle and feeder cattle futures were able to close higher on Tuesday, with a firm start expected this morning. The USDA crop report out today will have an inverse effect on cattle prices at 11:00 a.m. On Tuesday, cash cattle trade was $2 lower for the week in the southern plains, where cattle moved at $138 in a light test. Light live trade in Nebraska was also reported at $138, which was steady with of movement of 700 had on Monday. After stabilizing a few sessions, boxed beef prices moved back lower again, with the choice cutout falling $2.27 to $252.44 and select was lower by $5.28 at $244.94. June cattle will find renewed chart base selling on attempts to rally into the 138.00-140.00 range.