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Afternoon Market Recap for March 18, 2019

Disappointing export data triggers losses.

Corn, soybeans and most wheat contracts down slightly to start the week

Grain prices were relatively suppressed to start the week after USDA released some ho-hum export inspection data this morning, which prompted some technical selling. Corn and soybean prices were down around 0.4%, as winter wheat contracts took steeper cuts of 1% or more. Spring wheat prices moved higher, in contrast, partially due to headlines about flooding that continue to spill out of the central Plains.

Flood-ravaged portions of the Midwest and Plains hope to see a respite in coming days, with only small to moderate rain and snow predicted across the central U.S. between now and March 25, according to the latest cumulative seven-day precipitation map from NOAA. Temperatures will continue to come in slightly below normal in the central U.S. for the next day or two before climbing to slightly above-normal later this week.

Boeing and Facebook losses put a cap on Wall St. gains Monday, but the Dow did manage small gains of about 32 points in afternoon trading to reach 25,881. Energy prices also trended higher, anchored by crude oil gains from shrinking inventories. Crude oil picked up another 1% this afternoon to crest $59 per barrel. Gasoline was also up nearly 1.5% Monday afternoon, with diesel seeing only small gains on the day. The U.S. Dollar softened slightly.

Corn prices took moderate losses on some technical selling partially spurred by a tepid round of export inspection data from USDA this morning. May futures finished the session down 1.75 cents to $3.7150, as July futures slipped 1.5 cents lower to $3.8075.

Corn basis bids were mostly steady to firm to start the week, rising 1 to 3 cents higher across multiple Midwestern locations Monday. An Illinois ethanol plant bucked the trend, sinking 4 cents lower today.

Overall, corn basis bids painted are painting a complicated picture, according to Farm Futures senior grain market analyst Bryce Knorr: “[Bids last week were] steady to a little stronger, but that average disguised bids that were all over the board.” Learn more about how the latest trends are unfolding in Knorr’s latest Basis Outlook column, out this morning.

Corn export inspections inched below the prior week’s tally of 31.6 million bushels, notching 31.3 million bushels last week. That total was on the low end of trade estimates, which ranged between 29 million and 37 million bushels, with the weekly rate needed to match USDA forecasts moving up to 48.9 million bushels. Japan was the No. 1 destination, with 12.8 million bushels.

European Union corn imports for 2018/19 continue to trend significantly higher (+41%) year-over-year after reaching 689 million bushels as of March 17.

Last week, South Korea purchased another 2.7 million bushels of corn from optional origins without issuing an international tender. The grain is for arrival in early October.

Russian consultancy SovEcon estimates the country’s corn exports in March will top 7.8 million bushels, which is the lowest monthly total since October but still 36% ahead of the prior eight-month average.

EPA’s latest refinery exemptions brings total compliance-related ethanol losses to more than 900 million bushels of corn. Learn more about what’s going on by reading the latest DC Dialogue column from Farm Futures policy editor Jacqui Fatka.

Preliminary volume estimates were for 252,831 contracts, dropping 29% below Friday’s final count of 355,215.

Soybean prices retreated on a mediocre round of export inspection data, as traders also anxiously await fresh details regarding the ongoing U.S.-China trade negotiations. May futures fell 3.5 cents to $9.0575, with July futures down 3.75 cents to $3.1925.

Soybean basis bids were largely steady to firm Monday, moving 1 to 6 cents higher today amid generally sluggish farmer sales, although an Iowa river terminal dropped 7 cents lower to start the week.

Soybean export inspections reached 30.9 million bushels for the week ending March 14, which was slightly behind the prior week’s total of 32.6 million bushels and on the low end of trade estimates that ranged between 29 million and 36 million bushels. China was the No. 1 destination, with 9.9 million bushels.

European Union soybean imports for 2018/19 have reached 374.8 million bushels as of March 17, trending 11% higher year-over-year. In contrast, EU soymeal imports are down 9% year-over-year, with palm oil imports ticking 1% higher year-over-year.

Preliminary volume estimates were for 93,773 contracts, falling moderately below Friday’s final count of 165,909.

Wheat prices fell by as much as 1% Monday on some lackluster export inspection data, which served as a fresh reminder of large domestic and global stockpiles. May Chicago SRW futures fell 5.5 cents to $4.5675, with May Kansas City HRW futures down 5 cents to $4.38. MGEX spring wheat contracts bucked the trend, as late winter flooding in parts of the Midwest and Plains could put some of this year’s acres in jeopardy. May futures trended 6 cents higher to $5.6075.

Wheat export inspections slumped to 13.0 million bushels last week, down significantly from the prior week’s total of 22.5 million and falling below trade estimates that ranged between 14 million and 25 million bushels. The Philippines was the leading destination, with 2.3 million bushels.

European Union soft wheat exports for its 2018/19 marketing year have reached 477.7 million bushels as of March 17, trending 11% lower year-over-year. EU barley exports of 147 million bushels over the same period have tumbled 25% lower year-over-year.

But EU crop monitoring service MARS projects the region’s total per-acre soft wheat production could rise 7.4% this year, reaching 89.8 bushels per acre.

In Russia, the country’s SovEcon consultancy is projecting wheat exports totaling 66.1 million bushels in March, falling below the prior eight-month average by just over 50%.

Ethiopia issued an international tender to purchase nearly 14.7 million bushels of milling wheat with a deadline of April 19. The country faces a current grain deficit after struggling to produce wheat under drought conditions this past year.

Preliminary volume estimates were for 87,536 CBOT contracts, down slightly from Friday’s final count of 110,990.

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