Afternoon Corn and Soy: Rough day for the soy complex; March WASDE in the AM
<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>Compared to raucous recent history, the markets started the week in quietly mixed fashion. The soybean complex ended up stealing the show, posting lower closes across the board – 11 cents lower for old crop beans, 8 cents lower for new crop, $2/ton losses for meal, and over 1 c/lb (-2.5%) losses for bean oil. Corn futures ended steady to three cents higher. Managed Money funds are believed net long 245,000 corn, net short 30k soybeans, net long 5k oil, and short 75k meal. Cash corn and soy trade was steady/mixed.<br> <br>The early feature was not even a U.S. story; China imposed 100% tariffs on Canadian rapeseed oil over the weekend, which roiled the entire veg oil trade. Canadian rapeseed futures ended the day $40 (-6%) lower, but it was a boon to palm oil futures (+3% higher) on the probability of some positive substitution. Bean Oil took a modest hit today with the idea that stranded Canadian product would trade south, possibly in a hurry to beat tariffs? Mexico was quiet on the tariff front, which benefitted corn futures. The same could not be said for the stock market, which sold off sharply today as the White House suggested they may have to break a few economic eggs to make the tariff omelet they are intending? <br> <br>Grain inspections were a positive highlight. Corn in particular shone bright; inspections for the week ended 3/6 were 1.82 million metric tons (mmt), which was better than 1.35 mmt the prior week, and 1.17 mmt the prior year. Soybeans were no slouch either, registering 0.84 mmt in shipments, up from 0.70 mmt prior week and 0.79 prior year. Difficult to say if this represents roaring demand or ‘get it while you can’ tariff fear; unfortunately, it is probably the latter? YTD corn inspections move to 29.08 mmt vs. 21.86 on the books last year; YTD soy inspections are 38.44 mmt, running modestly ahead of 35.08 last year. Export news was mostly quiet over the weekend, though 8 AM sales watchers were treated to 126,000 metric tons (mt) of U.S. corn to Japan and 195,000 mt of old crop soybeans to ‘unknown’.<br> <br>The feature for at least a moment or two tomorrow will be the March crop report (WASDE). Historically, this is not a market-moving report, particularly with an eye toward the more meaningful Planting Intentions and Quarterly Grain Stocks reports at months’ end. In short, the market is looking for small reductions in world and domestic corn ending stocks, while soybeans are expected to be little changed. For our part, we would expect any curveballs to come from South American crop production, though overall we don’t think the USDA is too far off the mark today?<br> <br>Elsewhere, end-user markets were mostly steady/better despite the economic storm-clouds engulfing the financials. Both Crude Oil and U.S. equity indices are plumbing multi-month lows? The next major issue for ag markets will likely be Brazil safrinha corn weather, though we are probably a couple weeks out from forecasts becoming more market-moving? Recent rains have stabilized Argentina’s crop outlook, though not all crops benefitted equally (it arrived too late for some). AgRural said today that Brazil safrinha corn is now 92% planted, and soybeans are 61% harvested. For those looking for a taste of spring, Texas state said 24% of their corn had been planted, which is near average (23%).<br> <br>Calendar spreads were firmer in corn but weaker in soybeans. Inter-market, corn gained on beans, but both lost (significantly) to wheat. The soy crush was a little easier today, but the ethanol crush was a touch firmer. Oilshare was the big loser of the day, falling to a six week low. <br> <br>Looking at the charts, 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’, which is technically negative if there is follow-through. We see support for May just over $10 with tough 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 trend-line resistance around $315 for SMK.<br> <br>KJ </span></div></div>