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February 07, 2018 | Grain Hedge Insights | Kevin McNew | Views: 677

Southern Plains Dryness Continues Next Two Weeks

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up 1 cent, March soybeans down ¼ of a cent, March wheat up 5 ¼ cents and Kansas City wheat up 4 ½ cents. Temperatures are cold throughout Kansas and Oklahoma and the Texas Panhandle with temperatures at 5 a.m. ranging from 5 to 23 degrees Fahrenheit throughout the two wheat growing states. The forecast for the Southern Plains shows continued dryness over the next couple weeks.   

 

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The corn spreads between March and the deferred months have tightened since the start of the rally with the H8/N8 spread moving to $-.145 from $-.17 just two weeks ago. The spread has not seen this level since October 18th, 2017.

 

On Thursday at 11 AM CST the USDA will release its February Crop Production and WASDE report. In a Reuters survey of analysts the average trade estimate for corn ending stocks is 2.468 billion bushels compared to the January report of 2.477 billion. The average estimate for soybean ending stocks is 486 million bushels compared to January’s number of 470 million bushels. Wheat stocks are expected to be at 990 million compared to 989 million bushels in the January WASDE report.

The trade is expecting South American production to be revised lower in Argentina but higher for Brazil soybean production. The average trade guess is looking for Argentina corn production to be revised down to 40.68 MMT from 42 MMT in January due to the crop stress caused by hot dry conditions throughout critical growing regions. Argentina’s soybean production is also expected to be revised lower to 54.06 MMT from 56 MMT in January. The average analyst estimate for Brazil corn production is 93.73 MMT compared to 95 MMT in the January WASDE, but Brazil soybean production is expected to be revised higher to 111.20 MMT compared to 110 MMT in the January WASDE.

 

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