Grains were weaker overnight as soybeans took a dip below their highest prices since December. In outside markets, crude oil was lower while the US dollar continued to add to its winning streak, posting positive gains for the 5th day in a row.
Soybeans got a big boost on Tuesday as the rally moved up to the highs set back in early December. Stimulus is coming from the strength in the Brazilian Real, making Brazil soybeans more expensive in global markets, and talk of lower soybean acres by US farmers this spring. The Brazilian Real is up 12% since March 1 and reached fresh highs yesterday, but is trading lower this morning. US farmers were active sellers of cash soybeans yesterday. Basis levels for spot delivery were off quite readily in many locations yesterday.
In weather, cool temps for this weekend in the Plains are not expected to be as severe as last weekend. Also, rains are starting to appear in the forecast for OK & KS over the next few weeks which might give the wheat market a reason to turn lower.
Market attention is also turning towards the U.S. planted area forecasts and quarterly grain stocks estimates from the U.S. Department of Agriculture on March 31. The reports could inject volatility into markets generally burdened by record-large global grain stocks. Analyst forecasts are showing 1.5 to 2.5 million more acres of corn in 2016, while soybean forecasts are somewhere between slightly lower to slightly higher than 2015. As a result, soybean prices have strengthened relative to corn on this move higher.
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