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Grains end mixed, but mostly lower on Friday

Missed some marketing news this week? Check out the Ag Marketing IQs, market recaps and export news.

Missed some marketing news this week? Check out the Ag Marketing IQs, market recaps and export news from Farm Futures.

Ag Marketing IQ

With the recent collapse of energy values and the difficult predicament the ethanol industry currently faces, USDA will have no choice but to reduce Corn for Ethanol demand in Tuesday's Planting Intentions and Quarterly Stocks report.

Many of us feel that the market should pay more attention to production agriculture’s plight to cover costs and then some. However, the tools are available to protect your costs and your capital expense to produce a crop and still allow yourself the opportunity to participate in higher gross profit earnings, should prices rally. Be proactive in laying out your current plan and seek out opinions from others, especially your fellow producers, so that, in the end, you are confident that your operation is best for you.

USDA’s end-of-March reports are typically a big deal in the commodity market. This year the data on grain stocks and prospective plantings could mean a lot – or nothing. Acreage projections for corn and soybeans appear most likely to wind up in the waste basket.

Soybean acreage data released Tuesday needs to be analyzed against the context of the USDA Ag Outlook projection near the end of February. Then, USDA used 85.0 mil acres and produced a 330 mil U.S. soybean carryout. There has also been building optimism towards Chinese and global soy demand, when projecting both the current marketing season and the 20/21 season. Some have elevated Chinese soybean 20/21 imports to 95.0million metric tons. Thus, yesterday’s acreage number needs to increase by at least 1.5 mil acres in order to still have only a minimal cushion, in regard to ending stocks.

Immediately following the March planting intention report, focus usually looks toward the weather forecast. Some regions are off to a rough start.  Areas up and around North Dakota received 150% of their average snow levels by January 1st.  The spring temperatures will be critical to getting the remaining corn harvested and ground prepared for next season.  The Southeast U.S. is experiencing the 4th highest storm volume ever from tornadoes and thunderstorms in Mississippi, Alabama, Georgia and Tennessee.  This wet weather is expected to continue in these regions.

USDA

USDA’s weekly grain export inspection report for the week ending March 26 again offered a mixed bag of data. Corn led the charge, surging 48% higher week-over-week and topping all trade estimates. But soybean and wheat volumes stayed parked on the low end of trade guesses this past week, although wheat managed meager week-over-week gains.

USDA’s highly anticipated Prospective Plantings report, out Tuesday morning, showed bigger corn and soybean acres relative to 2019’s flood-soaked tally. Traders were already braced for some of the agency’s data, but other numbers still managed to be eye-popping.

USDA’s latest weekly export sales report once again held a mixed bag of results. Soybean sales were arguably the most bullish data set after climbing 75% above the prior four-week average. Corn sales remained relatively strong but moved moderately below last week’s tally, which was a marketing-year high. And wheat sales plummeted to a marketing-year low after spilling 86% below the prior four-week average.

Export sales were reported on three days this week. China purchased 22 million bushels of corn, Japan purchased 4.4 million bushels of corn and Mexico purchased 10.5 million bushels of soybeans.

Recaps

Corn prices followed energy futures higher again this morning on optimism over potential global production cuts. Soybean prices were mixed overnight as coronavirus fears competed with strengthening grain prices. Wheat prices rebounded overnight on a technical buying spree. The wheat complex is still on track to post weekly losses as coronavirus fears accounted for price losses for the past four trading sessions.

Grain prices were mixed but mostly lower Friday, with corn suffering another moderate setback as traders shook off news of a massive sale to China this morning as they remain focused on whether U.S. farmers will plant the third-most corn acres on record this year, as USDA projected earlier this week. Soybeans also took a moderate hit on a round of technical selling today. But wheat prices rebounded nearly 2% Friday as bullish global demand butted up against logistical challenges in some countries.

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