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The 4 things grain farmers should watch for in March

Jonathan Kirn/The Image Bank/GettyImages A Wisconsin farmer stands out in his snow-dusted cornfield in the low winter sun.
These events could spur another round of price action in this bull market.

Price volatility continues for grain futures. Extreme price swings, dynamic fundamentals, and strong global demand are creating an exciting bull market.   

Last Friday’s USDA Outlook Forum fed the bulls again with a continued view of tight ending stocks for corn, soybeans, and wheat for the remainder of 2021, and even heading into 2022! This outlook for tight ending stocks is due to strong demand, so if there are any weather issues this summer, the bull market will accelerate with gusto. 

After trading quietly since the Feb. 9 USDA report, grain futures prices resiliently resumed the uptrend this week. The outlook again remains friendly. Looking ahead, here are items to watch closing during the month of March which could spur the round of price action for this bull market:

Weather in Brazil

Second crop corn in Brazil is getting planted now, and the planting pace is much slower than normal due to the late soybean harvest. Second crop corn in Brazil accounts for nearly three quarters of their overall total corn production. Due to the late planting, the bulk of the crop will now be pollinating and developing in what will likely be the peak of the heat for that region. With the tighter global carryout picture for corn, the world will be watching the development the Brazilian corn crop. It would be harvested at a critical juncture in late July/early August, at a potential critical peak of global need as U.S. new crop supplies will not yet be available to the world.

March 9th WASDE report

While there will likely not be any major revisions to this report, we do look for the USDA to keep ending stocks tight for corn, soybeans, and wheat. Key demand aspects to watch; feed demand for wheat, export demand for all grains, global supplies, and global carryout.

March 31st Prospective Plantings report

The USDA Outlook Forum already provided insight into the potential planted U.S. acres for the 2021 season. 90 million acres of soybeans and 92 million acres of corn. There traditionally is not too large of a difference in planted acreage numbers between the February Outlook Forum and the late March Prospective Plantings report. However this year, trade is wondering if perhaps, due to the high prices for new crop corn and soybean prices, could the acre number climb yet for corn and soybeans? Other commodities to watch will be Spring Wheat and cotton. Will we continue to see higher prices for these two markets to make sure acres are not lost to higher priced soybeans?

Seasonals

One important fundamental to be aware of is the seasonal tendency for a grain price slide during the month of March. Even in 2008 (the crop year being so closely compared to the current year) both corn and soybeans had deep corrections lower during the month of March.

Ultimately, that setback was a healthy correction to set up the next price leg higher into summer.

The price volatility during the month of March is likely to be extreme with so many variable to monitor. Continue to stay current with your marketing plan for both old and new crop.

Reach Naomi Blohm: 800-334-9779 Twitter: @naomiblohm   and naomi@totalfarmmarketing.com
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The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 
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