The grains are higher in the overnight. Heavy rains over the weekend missed the main growing regions in Arg. Chinese Ethanol imports were up noticeably in February.
Market focused on Prospective Plantings report on March 29th. Exporters sell 132,000 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. Exporters sell 120,000 metric tons of Soybean Meal for delivery to Spain during the 2017/2018 marketing year.
Argentina Weekend Update
Although rains fell in Argentina over the weekend, significant rains missed the most important grain producing regions. Santiago Del Estero, Córdoba, southern Santa Fe and La Pampa all remained mostly dry over the weekend and continue to have very dry topsoil. Heavy rains fell over the weekend in northeastern Santa Fe, Corrientes and Rio Grande Do Sul with rain totals between 2” to 5” inches. Some rains also fell in Buenos Aires with central and northeastern Buenos Aires reporting only 1.1 inch. Rains are expected toward the end of this week in the northeastern part of the country, but meaningful precipitation is expected to miss the main growing regions again. Majority of crops entering late grain fill and full maturation stages.
Last Friday’s Trade Action was Supportive
Trade action on Friday seemed bullish after selling pressure in the first half of the day, which was triggered by trade tensions between the U.S. and China, was erased by the close of the session. On Friday, May corn traded a low of $3.69 ¼ but closed the day at $3.77. May soybeans traded as low as $10.09 ¼ but closed at $10.27 ¾. The days trading range was large and the fact that early and hard selling pressure could be turned around by the end of the day is a strong vote of confidence in the fundamentals of this market.
Commitments of Traders- (Week Ending March 20th)
The latest commitments of traders marks the end of an eight week long trend of buying corn and soybeans. This should not come as too much of a surprise as the chart clearly showed technical selling during that time window. Money Managers (MM) cut their net long position in corn to 213,231 from 233,063 LW. MM cut their net long position in soybeans to 195,522 from 208,200 LW. MM increased their net short position in CBOT wheat to -56,207 from -35,684 LW. MM increased their net long position in KCBT wheat to 29,586 from 28,947 LW. MM decreased their MGEX wheat position to net short 653 from a long position of 1,239 LW.
China Ethanol Imports Surge
China purchased the most ethanol since May 2016. Chinese demand for U.S. ethanol slowed last year following a tariff increase. China bought 197,652 cubic metres of ethanol in Feb. sourced almost entirely from the U.S. which was up 64% from January. The recent demand for U.S. ethanol is a sign that China will need to rely on trade to achieve the government mandate to mix biofuel into the nations fuel supply by 2020.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)