Wheat
Wheat started the week with small gains because of concerns towards the dry conditions in the Southern Plains and wet conditions in the Northern Plains. Recent rains were not as significant as expected and that helped to support the winter wheat. Spring wheat was supported by cold wet conditions as winter just does not want to end in the Northern Plains. But in the end, the friendly wheat fundamentals were just not enough to overcome the bearish corn market. This pushed wheat lower into the close.
The March 29 session had wheat open with small to modest gains with support spilling over from another week of poor crop condition ratings for the Southern Plains winter wheat crop. Conditions improved slightly in Kansas but slipped in Colorado, Oklahoma and Texas. Weather forecasts are not all that encouraging either, as no rain is in the forecast for the next 10 days.
The March 30 session had wheat taking the path of least resistance. In all, there was little news to help give wheat direction, so traders pushed the easy button and sold wheat. When in doubt, sell. There was a little negative news this morning as from forecasts that Japan likely will import about 5 percent less milling quality wheat this year, most of which comes from the U.S.. Fundamental news continues to be friendly.
Wheat opened the March 31 session higher, trading with gains throughout the session, not because of USDA's report, but because of spillover strength from a limit-up move in the corn market. USDA's reports were not friendly wheat as both the acreage and stocks estimates showed larger-than-expected estimates. Wheat stocks were estimated at 1.42 billion bushels, 5 percent more than last year at this time. The average trade estimate had stocks at 1.399 billion bushels. USDA is expecting producers to plant 58.03 million acres of wheat (57.3 million expected), 730,000 acres more than last year. Winter wheat acres are estimated at 41.23 million, 130,000 acres more than expected by the trade. But the biggest surprise came from the spring wheat acreage estimate. USDA is estimating spring wheat acreage at 14.43 million acres (13.73 million was average trade estimate), an increase of 700,000 over the average trade guess.
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Corn
To start the week, corn opened higher, but did not stay there long, drifting lower into the close to end the day down 18.5 cents. The market moved lower on follow-through selling from March 25's "Buy the Rumor-Sell the Fact" situation. News that China is releasing some of its feed wheat reserves also added pressure. Speculators are lightening up on their positions going into the report. The export inspections report was friendly, above estimates, but had little effect on the market.
Corn opened lower March 29 and traded both sides of unchanged for the session, ending the day slightly higher. The strength in the soybean and wheat complex supported the corn market. Wet cold weather through the central and northern U.S. added strength. The trade was nervous that USDA would come with a larger acreage and stocks estimate in the March 31 report. There has been some consolidating ahead of the reports.
Corn opened lower March 30 and traded with losses for the session, ending the day down 8.5 cents. The market felt pressure from news that Chinese officials are in Argentina talking about corn quality standards and their genetically modified varieties. But a larger concern was the upcoming USDA report. Meanwhile, ethanol production for the week ending March 25 averaged 903,000 barrels per day. This is down 1.1 percent vs. last week and up 6.61 percent vs. last year. Total ethanol production for the week was 6.321 million barrels. Corn used in last week's production is estimated at 94.8 million bushels. This crop year's cumulative corn used for ethanol production for this crop year is 2.8 billion bushels. Corn use needs to average 94.638 million bushels per week to meet this crop year's USDA estimate of 4.9 billion bushels.
Corn opened March 31 and remained lock limit up. USDA reported a 15 percent drop in corn stocks as of March 1 (compared with last year), which more than offset its larger than expected prospective corn plantings figure of 92.178 million acres. Corn acres planted in 2010 were 88.192 million acres and the trade estimate was 91.8 million acres. USDA pegged March 1 corn stocks at 6.523 billion bushels, which was about 165 million bushels below trade expectations and below the low end of trade guesses. This has traders talking about ending stocks near 500 million bushels for the old crop season, which many consider to be below the pipeline minimum. The stocks number confirms an extremely tight situation for old crop and a potentially tight situation for new crop
USDA's export sales report estimated last week's corn export sales pace at 75.2 million bushels, which was above the 21.6 million bushels needed to meet USDA projection of 1.95 billion bushels. This was at the high end of the estimates at 39.4 million to 78.7 million bushels and bullish for corn. This brings the year-to-date export sales pace for corn to 1.5074 billion bushels compared with 1.358 billion bushels one year ago. Total shipments this week were at 40.2 million bushels, below the 42.8 million bushels needed this week.
Soybeans
Soybeans started the week with modest gains with support coming from a friendly USDA export inspections report. Demand for U.S. beans remains strong and that helped to push soybeans early in the session. By midsession, the soybean market had started to falter with selling tied to a weaker corn market. Additional selling was tied to improving weather forecasts for South America, especially Argentina.
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The March 29 session had soybeans steady to slightly higher with support coming from position squaring ahead of the March 31 USDA report. Trading was lackluster on the opening bell because of spillover concerns toward corn, as traders were not quite sure if corn would open with strength or sell off again. Late session strength was a result of the unwinding of long corn short soybean spreads.
The soybean market was able to trade with modest gains March 30 as traders positioned themselves ahead of the USDA reports. In all, the reports were expected to be friendly to soybeans and that has been the supporting factor for soybeans the past few sessions. Weather forecasts continue to show improving conditions for South America, which should allow for advancing harvest activity.
Report day had the soybean market open sharply higher and trade with decent gains. Support came from USDA's reports. USDA released its prospective plantings and quarterly grain stocks reports March 31, and both were friendly soybeans. In the quarterly grains stocks, USDA estimated 1.25 billion bushels of soybeans were in U.S. bins on March 1, 2 percent less than last year at this time. Traders were estimating stocks closer to 1.299 billion bushels. Soybean's planted acreage estimate also was friendly as USDA estimated soybean acres to decline 1 percent (270,000 acres) to 76.6 million. The average trade estimate for soybean acres was 76.87 million. The changes in soybean acreage appeared to be in fringe states as most of the Corn Belt states left acreage unchanged from last year, except for Iowa, which is reporting a 4 percent cut in acres. North Dakota is expected to increase soybean acreage by 6 percent while Minnesota's acreage is unchanged.
Barley
USDA estimated U.S. 2011 barley planted acreage at 2.95 million, an increase of 3 percent over last year. North Dakota acreage is expected to drop 4 percent to 690,000 while Montana and Idaho are looking at increasing acreage 1 percent and 2 percent, respectively.
Durum
In its March prospective planting report, USDA estimated 2011 durum planted acreage at 2.365 million acres a decrease of 8 percent from last year. North Dakota acreage is expected to fall 11 percent to 1.6 million. Cash bids for milling quality durum remain unchanged at $8 in Berthold, N.D., while bids in Dickinson, N.D., increased 10 cents to $8.20.
Dry beans
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In its March planted acreage report, USDA estimated dry bean acreage at 1.3 million acres, a decrease of 32 percent from last year. North Dakota is expected to cut acreage 44 percent while Michigan, Minnesota and Nebraska are expected to cut acreage by 24 percent. The decrease in acres is a result of producers switching acres over to more profitable crops like corn and soybeans. It is certainly an indication that if dry edible bean acres are to increase, bids will have to increase to attract acres.
Canola
Canola futures on the Winnipeg, Manitoba, exchange closed lower in all months. For the week ending March 31, canola gained more than $12 (Canadian). The canola market was supported by planting concerns as it appears that winter will not end in the Northern Plains. Traders are concerned that canola acreage will decline because of late spring. USDA is estimating U.S. producers to plant 1.61 million acres of canola in 2011, an increase of 11 percent from last year. North Dakota is expected to increase acreage 11 percent to 1.42 million acres.
Sunflowers
Sunflower acreage in the U.S. is expected to decline 8 percent in 2011, declining to 1.8 million acres. Oil sunflower acreage is estimated at 1.4 million, 4 percent lower than 2010 while non oil sunflower acreage is estimated at 405,000 acres, a decrease of 17 percent from last year.
