Chinese demand drives market

Wheat March 21, the wheat markets opened with 5- to 7- cent gains but had narrowly mixed trade during the day to finish anywhere from 3 cents lower to 3 cents higher. News was quiet after the previous week's wild ride. New lows in the dollar inde...


March 21, the wheat markets opened with 5- to 7- cent gains but had narrowly mixed trade during the day to finish anywhere from 3 cents lower to 3 cents higher. News was quiet after the previous week's wild ride. New lows in the dollar index continued to support wheat, while another week of export inspections falling behind pace weighed on the market. Much of Kansas is receiving rain, while the dry areas of Texas and Oklahoma remain dry in the near-term forecasts. While the winter wheat crop looks very poor in some of those areas, there are good-looking wheat crops coming out of dormancy in other parts of the country. Minneapolis wheat is being supported by renewed concerns about delayed spring planting because of another major winter storm having moved through the Northern Plains.

The wheat markets opened with losses of up to 15 cents March 22 but slowly fought back during the day to finish mixed. The weekly crop condition reports showed a 1 percent improvement in the Kansas winter wheat crop, at only 27 percent good to excellent. Texas had a 4 percent cut and Oklahoma a 3 percent cut to be at only 14 percent good to excellent in Texas and 24 percent good to excellent in Oklahoma. Those three states normally are the top producers of winter wheat in the U.S. There was an export sale announced to Nigeria, and Japan bought wheat from the U.S. and Australia.

March 23, the wheat markets opened with small gains but quickly slid lower to finish the day with losses of 7 to 15 cents. Selling pressure affected all the grain markets, as the dollar index rallied off of its recent lows and there was lackluster trade in other outside markets. The Kansas City market had the steepest losses because of moisture entering the two-week forecast for parts of the Southern Plains. Heavy snows in the Northern Plains should support the Minneapolis market, as the likelihood of spring flooding and planting delays has increased. The value of Chicago wheat now is nearly equivalent to corn on a per-pound basis, so look for wheat to compete with corn in feed rations going forward.

March 24, the wheat markets opened with 4- to 7- cent gains and rallied throughout the day to finish with gains of 23 to 25 cents. March 23 headlines had rain in the forecast for the Southern Plains, but those chances looked much less likely March 24. In addition, temperatures lower than 20 degrees in Kansas had traders worried about the developing wheat crop. Weekly export sales were decent, though shipments continue to lag behind. The real newsmaker in the export sales report was the sale of 116,000 metric tons of wheat to China. That news fueled buying interest in both wheat and corn, as it was viewed as evidence that China is in the market for other grains besides soybeans.


USDA reported total export sales of 27.4 million bushels of wheat, with old crop sales of 24.2 million bushels, well above the 7.5 million bushels needed to keep pace with USDA projections. Shipments of 22.8 million bushels were below the 35.8 million bushels needed to keep pace with USDA projections.


To start the week March 21, the corn market opened 1 cent higher and traded choppy for the session before finishing with 3-cent gains. The market was looking for confirmation that China purchased corn from the U.S. at the open. With no news, the market moved to trade with small losses as profit taking took place. The export inspections were disappointing and below estimates at midday to add additional weakness. Export inspections will need to average 43 million bushels the rest of the year to realize USDA's projection of 1.95 billion bushels. The market did firm up into the close, as there was a sale of 116,000 tons of corn to an unknown destination. New crop corn was supported by an unsettled forecast for the Midwest.

March 22, the corn futures opened 12 cents lower, but did not stay there long and ended the day slightly higher. The market was under pressure at the open from the lower overnight trade and the lack of any confirmation that China purchased corn. The China Reserve Corp. is denying rumors that China has purchased corn on the world market. Selling interest went to the sidelines early and the market started to firm up. Corn planting is 43 percent complete in Texas, compared with a five-year average of 41 percent, but there are concerns about the dry conditions.

The corn futures opened 2 cents lower March 23 and traded with small losses for the session, ending the day down 5.75 cents. A cool and wet outlook for the Midwest and the Northern Plains had traders expecting a higher opening, but weakness in the wheat market and a firm U.S. dollar helped to spark some increased long liquidation selling and a move lower into midsession. Ethanol production for the week ending March 18 averaged 913,000 barrels per day. This is up 2.01 percent vs. the previous week and up 7.79 percent vs. last year. Corn stocks at select export elevators and terminals were up 3.6 million bushels from the previous week at 874.7 million bushels. The spread between Chicago wheat and corn now is 0.2 cents per pound, the most favorable in 10 years.

March 24, the corn market opened 1 cent higher and chopped around until midday, at which time buying interest entered the market and pushed the corn higher into the close. Corn finished with gains of 21.5 cents. Strong gains in wheat and a positive tone to outside markets supported corn as the day progressed. Wet weather is forecast for the Midwest, which will delay field work and add strength to the market. Export sales were within range, but shipments continue to lag. There also was some positioning ahead the upcoming USDA acreage and quarterly stocks report. Analyst estimates range from 91.2 million acres to 93 million acres.


Soybeans opened with 4-cent gains on March 21 and traded on both sides of unchanged before finishing with small gains in old crop and gains of up to 11 cents in new crop. Outside markets were supportive, with continued losses in the dollar index and gains in crude oil as violence again has escalated in Libya. New crop contracts are being supported by the acreage battle with corn, after Informa released its bullish acreage numbers recently.


March 22, the soybean contracts opened with losses of up to 18 cents, but were able to slowly battle back during the day to finish narrowly mixed. Global oilseed markets were lower overnight, but a recovery in outside markets during the day helped soybeans. Heavy rains continue to create harvest delays in parts of Brazil, while weather has turned friendlier elsewhere. Private estimates for U.S. soybean acreage are coming in significantly lower than USDA baseline estimates, setting the market up for an interesting day March 31. There was news that a Chinese grain company is investing $2.4 billion in a soybean terminal and processing facility in Brazil, which would be negative for U.S. bean exports.

Soybean contracts opened with light losses March 23, but slipped lower throughout the day to finish with losses of 10 to 14 cents. The dollar index rallied off of its lows and stock markets were lower, so pressure was felt in the commodity sector. Forecasts are calling for more rain in South America, with more harvest delays likely in Brazil, but the rains could help some of the later-maturing crop in Argentina. China raised its estimates of March soybean imports from 3.65 million metric tons up to 3.9 million metric tons, an indication of how strong demand is from that country.

March 24, the soybean market opened with small gains and had light losses for much of the day before rallies in the corn and wheat markets allowed soybeans to close with gains of 3 to 10 cents. Soybeans were the follower, with support coming from the cereal grains and light support from outside markets. New crop contracts had the larger gains because of acreage competition with corn. February domestic crush data came in at 129.4 million bushels, below estimates of 130.6 million bushels.


USDA reported no export sales or shipments for barley. Cash feed barley bids in Minneapolis gained 5 cents on March 24 to be at $4.75, and malting gained 5 cents at $5.90.


USDA reported export sales of 300,000 bushels of durum, with shipments of 600,000 bushels. Cash bids for milling quality durum were at $7.90 in Dickinson, N.D., and $7.75 in Berthold, N.D., March 24.



Canola futures on the Winnipeg exchange finished with gains of up to $7 (Canadian) per ton for the week. Commercial buying stepped back into the market after the previous week's wild action. Choppy action in the soybean complex was reflected in the canola market, with canola closely following the other oilseed markets. Concerns about spring planting delays continue to support the market, while the uptick in the Canadian dollar is limiting gains in canola. Positioning ahead of the upcoming USDA report and continued concerns about spring planting delays drove the market. Cash bids had gains for the week, with 50-cent gains in new crop bids and gains of almost $2 in nearby bids.

Cash bids in Velva, N.D., March 24 were at $26.71 for old crop and $24.11 for new crop.


Oil futures finished slightly higher for the week after seeing choppy market action. Trade was lighter than the previous week, with direction coming from the value of the dollar index and energy prices. Cash bids for NuSun sunflowers gained 10 cents on the week with March 24's bid at $29.45 in Fargo, N.D.

Dry beans

USDA reported mostly steady bids for dry beans the previous week, though the wild fluctuations in other commodity markets caused some participants to take a step back out of the market. There is a lot of attention on where new crop acres will be, with USDA estimating a cut of 20 percent to 25 percent in bean acres. This would reduce acres to maintenance levels.

Related Topics: CROPSMARKETS
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