Acreage split remains the big question

Wheat

Early week strength came from the U.S. coming in as the cheapest bid for an Egyptian tender (before freight costs). The U.S. was $13.74 per metric ton cheaper than France and $16.50 per metric ton cheaper than Russia. Weekly export sales were 475,700 metric tons (17.5 million bushels), which was above trade expectations. Total commitments of 868 million bushels are up 3.5 percent from a year ago compared to the U.S. Department of Agriculture's expectation of a 7.1 percent year-over-year increase.

Both the Minneapolis and Chicago contracts traded at to slightly above short-term resistance areas before retreating in March 26 trade. Chicago traded to $4.78 with $4.7875 considered a heavy resistance point. May Minneapolis traded to $5.7675, with $5.73 considered resistance. As of the March 28 close, Minneapolis shows $5.52 as support with Chicago at $5.635.

Weekly in state Kansas hard red wheat crop progress reports showed improvement with Oklahoma having a noticeable increase of 14 percent in the good to excellent rating to 74 percent good to excellent. Kansas improved 3 percent to 52 percent good to excellent. Texas improved 6 percent to 39 percent good to excellent.

Chicago soft red wheat ratings continue to be below the five-year averages with Arkansas at 32 percent good to excellent and 34 percent poor to very poor, although it was a 4 percent improvement. Monthly in-state reports showed Kentucky dropping 9 percent to 53 percent good to excellent and Illinois dropping 5 percent to 41 percent good to excellent. Soggy conditions across the Mississippi Delta and the mid-South account for these lower ratings.

The U.S. dollar trended higher all week to $96.75. This marks a $1.60 move higher from the March 20 low. The push above short-term resistance of $96.50 was particularly negative for the wheat complex. Heavy resistance for the June U.S. dollar is the March 7 high of $97.16.

The March Planting Intentions report will be March 29. The average range of guesses for all wheat is 46.9 million acres compared to 47.8 million acres last year. The range is from 45.9 million to 48 million acres. The average guess for U.S. spring wheat plantings is 13.4 million acres compared to 13.2 million acres from last year. The range is 12.6 million to 13.9 million acres. Durum average acreage guess is at 2.08 million acres versus 2.065 ma last year.

Quarterly Grain Stocks will also be released March 29. Overall, as of March 1, the U.S. will likely have more wheat bushels than last year's 1.495 billion. The average guess is 1.555 billion bushels with a range of 1.435 billion to 1.617 billion bushels.

For the week ending March 28 , May contracts for Minneapolis wheat were down 12.25 cents at $5.60, down 1.5 cents at $4.645 for Chicago wheat, and down 6.25 cents at $4.3875 for Kansas City wheat.

Corn

The new marketing year will continue to form as the March 29 report begins to reflect intended acres for the U.S. crop. It has been widely speculated that acres will shift away from soybeans and into crops such as wheat and corn. Ahead of the March 29 USDA survey release, the expected amount of corn acres is 91.3 million with a range of 89.5 million 92.7 million estimated acres. The USDA's February report estimated 92 million corn acres. The March 29 report is likely to be lower. However, as the USDA began surveying for this report, there has been flooding in several key corn states, it will be difficult to know how accurate the USDA's number will be because of this flooding.

It is notable that managed money funds have recently been a record net short this market around 261,000 contracts, they are currently net short 243,000 contracts. The funds have not seen a reason to short cover their heavy short futures load.

For the week ending March 21, USDA reported 35.6 million bushels of corn export sales for 2018-19 and 3.4 million bushels for 2019-20. Total commitments of 1.679 billion bushels in 2018-19 are down 8 percent from a year ago. Weekly export shipments of 37.8 million bushels put total corn shipments up 25 percent from a year ago.

Ethanol production for the week ending March 22 averaged 975,000 barrels a day, down 2.89 percent from the previous week. Ethanol stocks for the same week were 24.448 million barrels, up 0.15 percent from the previous week. This week's ethanol report was quite bearish; however, with recent flooding affecting several large ethanol plants a bearish report was expected.

The South American corn crop continues to be a bearish factor in this market. Argentina's corn crop will be a record crop, and with recent rains in Brazil, the Safrinha crop is expected to improve on an already strong start.

Soybeans

Soybean futures traded down to four-month lows this week and saw its lowest close since Oct. 31. U.S. and Chinese negotiators met March 28 and 29 in high-level talks and the trade will be combing through any news that comes out of it. China is expected to return the favor and come to Washington for more discussions starting April 3. There may be tweets and rumors flying around on how talks are going, but the trade seems to be at the point where they want and need hard facts to trade.

While waiting for U.S./China news, the trade also seems to be in a holding pattern until they see what the April weather pattern brings. Soybeans were also under pressure as a purge of Chinese hogs, because of the African Swine Flu, may lower soybean usage for the foreseeable future.

The trade was positioning ahead of the USDA's Prospective Plantings and Grain Stocks report that was released March 29. There were concerns about a rise in soybean acres from the 85 million acres the USDA projected in their February outlook.

U.S. soybean stocks for 2019 as of March 1 were expected to come in at 2.68 billion bushels versus 2.109 billion bushels last year at this time. There have been a wide range of estimates for 2019 U.S. planted acres. Many of the estimates have been in the 85 million to 87 million acres range. U.S. soybean planted acres were 89.2 million acres last year.

The weekly South American crop roundup estimates Brazil's soybean crop at 115 million to 115.5 million metric tons versus USDA's 116.5 million metric ton forecast. The weekly South American crop roundup estimates Argentina's soybean crop at 55 million metric tons, the same as the USDA. Early soybean yields are tracking above the five-year average.

Soybean weekly export inspections for 2018-19 total 1.0492 billion bushels, down 30 percent from a year ago and far below USDA's estimate for a 12 percent reduction. USDA export sales were poor for the week ending March 21 at 6.7 million bushels for 2018-19 and 600,000 bushels for 2019-20. Total commitments of 1.531 billion bushels in 2018-19 are down 17 percent from a year ago.

May soybean futures tested the recent lows of $8.8775 and snuck back above it. The contract low of $8.53 set in mid-September is now major support. The psychological $9 mark is now resistance. Resistance is $9.345, which was the high Feb. 25. November soybeans were down 13.75 cents for the week ending March 28.

Canola

For the week ending March 28, May canola futures were up $1.30 at $455.20 Canadian per metric ton. The April Canadian dollar was at 0.7444. This brings the U.S. price to $15.28 per hundredweight.

• Velva, N.D., $15.37 per hundredweight, May at $15.37.

• Enderlin, N.D., $16.22 per hundredweight, May at $16.22.

• Hallock, Minn., $15.56 per hundredweight, May at $15.56.

• Fargo, N.D., $16.20 per hundredweight, May at $16.

Barley

Cash feed barley bids in Minneapolis were at $2.60, while malting barley received no quote. Berthold, N.D., bid is $2.50 and CHS Southwest New Salem, N.D., bid is $2.55.

Durum

Cash bids for milling quality durum are $4.50 in Berthold and at $4.40 in Dickinson, N.D.

Sunflower

Cash sunflower bids in Fargo were at $17.55. April bids were at $17.60.

Soybean oil was up 17 cents at $28.65 on the May contract.