Afternoon Corn and Soy: As expected, March WASDE was more focused on world statistics
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Afternoon Corn and Soy: <br id=\"isPasted\"> <br>Report day brought quietly mixed trade for the markets – though we highly doubt a blasé March WASDE contributed meaningfully to price movement. Both corn and beans were slightly higher going into the release and turned slightly lower late session. Settlements were 1-2 cents lower for corn, 1-3 cents lower for soybeans, ~30 ticks lower for bean oil, and less than $1 lower for meal. Cash trade leaned firmer, particularly in corn, where grain buyers are trying to shake loose some farm selling.<br> <br>As expected, the March WASDE made only token adjustments, focused on the world S&D. The domestic corn balance sheet was left completely unchanged, maintaining a 1.540 billion bushel carryout view (vs. 1.763 prior year). On beans, the USDA shuffled 3 million bushels from seed and into residual (perhaps foreshadowing lower bean acres coming???). Here, too, domestic soy carryout was left unchanged from the Feb report at 380 million bushels, though they did reduce the farm gate price of beans to $9.95 (from $10.10). Soy Oil featured a more meaningful switcheroo; they raised US soy oil exports by 200 mil lb while cutting biofuel usage by 150 mil lb. A small increase in carry-in stocks maintained their 24/25 U.S. soy oil carryout forecast of 1.531 billion lb. The meal statistics were completely unchanged with a 450k ton carryout projection.<br> <br>The world balance sheet held a little more feature. The USDA raised the world soybean crush by 3 million metric tons (mmt), which in turn knocked 3 mmt off 24/25 world carryout. At 121.41 mmt, world soy carryout is still meaningfully above recent norms (112.55 in 23/24, 101.24 mmt in 22/23). Corn statistics held a handful of small changes; small increase in Russian production (0.75 mmt) nearly offset by a reduction in South Africa (-1 mmt). Mexican output was cut -0.4 mmt, while Ukraine was raised +0.3 mmt. The deciding factor was a long-awaited adjustment to last year’s (23/24) Brazilian corn production, which was cut -3 mmt to 119 mmt. We have been lobbying for over one year for this! The resulting reduced carry-in flowed directly into another cut for 24/25 world corn carryout, pegged at 288.9 mmt vs. 290.3 prior and 314.0 last year.<br> <br>Tariff headlines again induced some trader heartburn. Canada’s Ontario province said they would impose a 25% tariff on electricity sold to the U.S. The White House responded with a stepped-up 50% tariff on Canadian metal imports. As we went to press, both Canada and the U.S. were walking back the levies?? Perhaps more consequential to the grain markets was a U.S.-Ukraine temporary cease fire proposal that was announced late session. Russia’s response is pending? A resolution to the Ukraine-Russia conflict would allow some risk premium to be removed from the markets (though we suspect not much remains??) and free up world grain trade flows some. We are skeptical Russia will agree? Stay tuned!<br> <br>The report-du-jour tomorrow is the weekly EIA. We are expecting slightly friendly feature for ethanol. Production is likely to retreat around -2% on the start of seasonal turnarounds. Blender demand could pause after a strong showing the prior week; exports should also hang around prior week levels. Ethanol inventory should hold roughly steady on the week (maybe small draw, maybe small build). The ethanol crush has bounced back this week after briefly falling into negative territory, thanks to improved cash ethanol sentiment. <br> <br>Elsewhere, end-user markets were mixed today; livestock mostly easier, while milk firmed. Outside markets maintained recent trends; dollar and stocks weak, oil attempting an anemic rebound but not accomplishing much. South Korea’s NOFI booked a couple of optional origin corn cargos overnight. Media reports suggest Indian veg oil imports were down in February, dragging inventory there to a multi-year low. Given the recent market drop, it may not be a bad idea for them to look at taking some coverage?! South American weather remains in a beneficial holding pattern.<br> <br>In the options, 3,000 July $5.60 Calls traded at just under 5 cents post-report. Pre-report, just over 1,000 April $10.40 Soy Calls traded at just under three cents (they expire in ten days). Calendar spreads were a little easier in corn but little changed in beans. Inter-market spreads were little changed (wheat lost a little ground). The soy crush was weaker again today, closing at a three month low. Oilshare sold off again, falling to a new six week low. Oilshare’s RSI is getting moderately oversold (RSI at 26 in July).<br> <br>Looking at the charts, last Tuesday’s lows ($4.42 CK, $4.41 CZ) have established support for the corn market to lean on. Overhead resistance is just ahead; a 50% retracement of the break comes in at $4.78; a two-thirds fib is $4.87. Initial resistance for CZ comes in just above $4.60. Futures are no longer oversold (low 40’s RSI). May Soybeans posted an ‘outside day reversal lower,” yesterday but saw only limited follow-through today. We see support for May just over $10 with resistance around $10.40. A ‘good trade’ would be over $10.65? May Bean Oil has established significant resistance around 45-46 c/lb. We are in search of support, but if the trend of ‘higher lows’ is to remain intact on the daily, 41 c/lb should hold. May Meal is pushing farther away from a probable decent trading low made early month at $290. There is stiff trend-line resistance around $315 for SMK.<br> <br>KJ </span></div></div>