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Wheat prices continue to erode

Market week in review: Did USDA delay the inevitable in this week's WASDE?

Need a quick catch up on market news? Here's what you may be missed this week.

Ag Marketing IQ

Traditionally, we call the next few month’s ‘Silly Season’ but after the past year it feels like we are already well into it. Volatile market moves can be the norm when the U.S. crop goes in the ground and develops, and with the tight stocks situation, there is little room for a production hiccup this year, in the U.S. or abroad. A slew of reports this month could very well set the stage for the months ahead.

Corn growers penciling out 2021 income projections have a lot to smile about. After years of gloomy prospects, new crop futures translate into profit margins of around 30% for the average producer. Farmers have myriad tools and strategies for managing that risk, but there’s no one-size-fits-all marketing plan. I looked at 10 combinations for pricing 2021 corn, and each has strengths as well as weaknesses.

The central parts of Mato Grosso and Tocantins have been experiencing record rainfalls with some farms receiving 10 inches within a couple of days.  A friend of mine who farms in northern Mato Grosso says it has rained over 30 inches in the last three weeks.  It is as if the lack of rainfall to start the season has suddenly come all at once. To be clear, large swamping rains are a regular occurrence in Brazil; however, even this is getting out of control. 

The month of March has been a quiet trade start for many grain commodities. Not even the recent USDA report could coax corn and soybean futures out of their current trading ranges. Old crop corn and soybean futures continue to consolidate in a narrow trading range, waiting for some piece of fundamental news to justify the next price action.

USDA chose to punt this week, making no revisions to domestic supply nor demand categories when it released its March 9 WASDE report.  The trade wasn't surprised by this move as USDA tends not to make significant adjustments in the March report. Still, in the big picture, we believe that USDA delayed the inevitable and upward demand adjustments will happen; it’s just a matter of when.


Corn volume faded from a week ago but still landed on the higher end of trade estimates in the latest round of grain export inspection data from USDA. Soybean totals were also down week-over-week, while wheat trended 41% higher than the prior weeks’ tally.

USDA’s latest weekly export report didn’t have any outstanding news but still held some bullish details. Old crop corn, soybeans and wheat sales all trended higher from the prior week’s dismal tally, but all three crops still failed to match their prior four-week averages.


The March 2021 WASDE report is not expected to see a significant change in U.S. ending grain stocks when USDA releases updated number tomorrow, but that doesn’t mean there won’t be any excitement.

The March 2021 World Agricultural Supply and Demand Estimates (WASDE) report was largely expected to be a bit of a sleeper. But keeping true to form over the past year, USDA surprised markets by forecasting higher Brazilian soybean production instead of slightly lowering that total. The World Agricultural Outlook Board (WAOB) added 36.7 million bushels of output to Brazil’s soybean crop.


Concerns about the fate of Brazilian corn supplies amidst unprecedented planting delays and falling Argentine yields amid a flash drought could not outweigh investors’ worry about new Chinese export sales this morning, sending corn futures falling $0.03 - $0.05/bushel. Despite heat stress damage to the Argentine soy crop and increasing reports of Brazilian soybean fields turning to mush, traders continue to wait for news about Brazilian harvest progress and yield estimates before returning to their bullish position on soybeans. Spring wheat prices saw a boost this morning from a recent uptick in Chinese demand.

Corn prices tried to overcome overnight losses of 3 to 5 cents during Friday’s session, with mixed results after a round of uneven technical maneuvering. Soybean prices moved through a choppy session with not much to show for today’s efforts after ending the session lightly mixed. Wheat prices continued to erode lower Friday on another round of technical selling.

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