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Small gains for grains

Wheat For the week ending March 12, May Minneapolis gained 13 cents, May Chicago gained 24.75 cents and May Kansas City gained 24.25 cents. As of 10 a.m. March 13, wheat trade was down 4 to 7 cents. Wheat moved higher March 12 with profit taking ...

Ray Grabanski
Grabanski is president of Progressive Ag, a Fargo, N.D.-based hedge brokerage firm. Reach him at 800-450-1404.

Wheat

For the week ending March 12, May Minneapolis gained 13 cents, May Chicago gained 24.75 cents and May Kansas City gained 24.25 cents. As of 10 a.m. March 13, wheat trade was down 4 to 7 cents.

Wheat moved higher March 12 with profit taking following new contract lows. Last week's export inspections were well below the amount needed to keep pace with the U.S. Department of Agriculture's projection as the strong U.S. dollar continues to limit wheat's export appeal. The forecast will bring warm and dry weather for the southwest plains, while the eastern Midwest sees a chance for rain.

The wheat market was lower ahead of the 11 a.m. USDA report. On March 9, state National Agricultural Statistics Service offices released crop conditions, showing improvement in a number of places. Kansas was 46 percent good to excellent, up 2 percent from the previous week, while Texas was at 50 percent good to excellent, up 4 percent from the previous week. Another day of sharp gains in the U.S. dollar provided additional pressure as it hurts U.S. wheat export competitiveness. Following the report, wheat moved higher as U.S. carryout came in at 691 million bushels, down from 692 million last month and below the 700 million bushels expected. World carryout dipped to 197.71 million metric tons from 197.9 million in February.

Wheat traded higher March 11 and 12. The lack of meaningful change from February's numbers in the March 10 report and weakness in the U.S. dollar on March 12 provided support. The March 12 weekly export sales report showed sales above the amount needed to keep pace, but shipments still well behind. The U.S. dollar will need to continue to drop if U.S. wheat is to become competitive again. Warmer weather has arrived and should give the market a better idea of the condition of winter wheat as it starts to come out of dormancy. For the forecast, the southwest plains look to remain dry in the near-term, while the Delta and Ohio Valley have received too much moisture and are at risk of flooding.

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USDA estimated wheat export shipments pace for the week ending March 6 at 13.8 million bushels. This brings the year-to-date export shipments pace for wheat to 639.3 million bushels, compared with 895.5 million last year at this time. Wheat export sales pace for the week ending March 6 was estimated at 16.4 million bushels. This brings wheat's export sales to 817.7 million bushels, compared with 1.07 billion last year. With 12 weeks left in wheat's export marketing year, shipments need to average 21.7 million bushels and sales need to average 6.86 million to reach USDA's estimate of 900 million bushels.

Corn

The corn market traded sideways again last week, even with a report from USDA that was viewed as friendly. USDA lowered stocks by 50 million bushels, more than the trade was expecting. The Southern U.S. is also too wet, and that has created planting delays. But buying interest remained quiet and 12-year highs in the dollar have not helped. The focus going forward will now be the acreage and quarterly stocks report that will be released at the end of the month, with expectations that acres will be down from last year. As of the March 12 close, the May contract was up 2.5 cents for the week.

The futures were firm to start the week as traders positioned for the March 10 USDA report, expecting a small drop in stocks. The report was viewed as friendly to the market, while the market closed with small losses.

USDA lowered domestic ending stocks by 50 million bushels to 1.78 billion bushels, compared with a trade estimate of 1.826 billion. USDA lowered corn use for ethanol by 50 million bushels, increased feed and residual use by 50 million bushels and increased exports by 50 million bushels.

USDA said the lower ethanol figure was a result of a higher corn conversion to ethanol at 2.8 gallons per bushel. The U.S. corn ending stocks-to-use ratio declined slightly to 13 percent. Globally, USDA made several changes to the supply and demand that lowered ending stocks below the pre-report estimate of 189.67 million metric tons to 185.28 million metric tons, some of that coming from a large revision lower to the 2013 to '14 beginning stocks by 1.66 million metric tons. South Africa's production decline was offset by an increase in Argentina's corn production. Brazilian corn production was left unchanged. The global stocks-to-use ratio also declined slightly to 19 percent.

Corn closed with 3-cent gains on March 11, but gave it back on March 12. Support came from smaller-than-expected stocks, and the ethanol report showed corn use up last week and lower stocks. Selling came back into the trade to end the week, with talk of lower South American prices for corn some might be imported into the U.S. Additional weakness came from a strong dollar and crude oil stocks continue to grow. May corn was down 6 cents the morning of March 13.

USDA's export inspections report was friendly for corn at 46.5 million bushels, above the 38.8 million needed to meet USDA's projection. Corn export sales were estimated at 16.5 million bushels, just above the needed amount of 15.3 million bushels to stay on pace with USDA's estimate of 1.8 billion bushels. The shipments came in at 45.9 million bushels, above the 40.6 million needed to keep pace with USDA projections.

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Soybeans

As of the March 12 close, May soybeans were 5.5 cents higher for the week, while November soybeans were up 2.25 cents. At 10 a.m. March 13, May soybeans were trading 14.5 cents lower and the November contract was down 13 cents.

Soybeans moved higher March 9 as traders positioned ahead of the march 10 World Agricultural Supply and Demand report. Conditions in South America remain generally favorable from a weather standpoint, but logistics continue to threaten problems with potential growing for a port strike. March 9 export inspections were decent, coming in above the amount needed to keep pace with USDA's current projection.

Soybeans were trading lower the morning of March 10, ahead of USDA's monthly WASDE report. The report was expected to show strong carryout numbers and did not disappoint. Domestic carryout was unchanged at 385 million bushels, compared with 375 million expected. World ending stocks were up to 89.53 million metric tons from 89.26 million in February. Production estimates for Brazil and Argentina were unchanged at 94.5 million metric tons and 56 million metric tons, respectively. Despite export sales already at 98 percent of USDA's estimate for the year the export estimate was not changed. Another day of sharp gains in the U.S. dollar provided additional pressure.

Soybeans traded higher March 11, recovering most of the March 10 losses. The March 10 report made little change to the domestic and world carryout, and though export expectations weren't raised, they likely will be in a future report. The South American harvest continues to move forward with no significant threats in the forecast. The trade can now begin to turn its attention toward the prospective plantings report that will be released March 31.

Soybeans quietly moved lower March 12, following disappointing numbers in the weekly export sales report. The export sales were still well above the amount needed to keep pace with USDA's projection, but substantially lower than the previous week.

USDA reported soybean export inspections pace the week ending March 6 at 23 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.563 billion bushels, compared with 1.395 billion bushels last year at this time. Soybean export sales pace for the week ending March 6 was estimated at 6.2 million bushels. This brings soybean's export sales to 1.756 billion bushels, compared with 1.625 billion last year. With 25 weeks left in soybean's export marketing year, shipments need to average 9.067 million bushels and sales need to average 1.36 million to reach USDA's estimate of 1.79 billion.

Barley

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USDA reported barley export inspections pace for the week ending March 6 at 196,215 bushels. This brings the year-to-date export shipments pace for barley to 7.11 million bushels, compared with 6.57 million last year at this time.

Barley export sales for the week ending March 6 were reported at 100,000 bushels, bringing this year's total to 6.5 million bushels, compared with 7.6 million bushels last year at this time.

For the week ending March 12, cash feed barley bids in Minneapolis were unchanged at $2.70 per bushel, while there was no bid for malting barley.

Durum

USDA reported durum export inspections pace for the week ending March 6 at 2.002 million bushels.

There were no export sales reported the week ending March 6 for durum.

For the week ending March 12, cash bids for milling quality durum were at $9.50 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $9.75.

Canola

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For the week ending March 12, the front month May canola contract gained $13 to $463.70 (Canadian). Short covering and positioning ahead of the March 10 USDA WASDE report led canola higher March 9.

Weakness in the Canadian dollar helped support the canola market through the middle of the week. Canola traded with losses March 12 with pressure from profit taking and weakness in outside oilseed markets, as well as gains in the Canadian dollar.

For the week ending March 12, cash canola bids in Velva, N.D., increased 36 cents to $16.37 per hundredweight.

Sunflowers

USDA estimated soybean oil export sales pace for the week ending March 6 at 4.6 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 583.7 thousand metric tons, compared with 556.6 thousand metric tons for last year.

For the week ending March 12, May soybean oil futures were 41 cents lower to $30.87. Cash sunflower bids in Fargo, N.D., were 10 cents lower on the week at $19.15 per hundredweight.

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