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Grains were Mixed in the Overnight

Outside markets for crude oil and stock indices were higher

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Grains were mixed overnight as soybeans and corn drifted lower while wheat posted modest advances to start the week. Outside markets for crude oil and stock indices were higher while the US dollar fell modestly.

Thursday March 31 brings news inputs from USDA as they will release their quarterly grain stocks report and spring planting intentions report. The average estimate for March 1 corn stocks was 7.801 billion bushels, with a range of 7.700 to 7.975 billion. That average would represent the largest March 1 corn stocks since 1987, and the second-most in records dating to the 1920s. For soybeans, the average March 1 stocks estimate was 1.556 billion bushels, with a range of 1.425 to 1.615 billion. For wheat, the average was 1.356 billion, with a range of 1.325 to 1.460 billion. For U.S. planting intentions, the average estimate for corn was 89.972 million acres (range 89.0-91.0), up from 88.0 million in 2015. For soybeans the average was 83.057 million acres (range 81.6-84.2), up from 82.7 million in 2015. The average estimate of all-wheat plantings was 51.702 million acres (range 50.669-54.845), down from 54.6 million in 2015.

China, the world's second-largest corn consumer, will let the market decide domestic corn prices and scrap its nine-year old stockpiling scheme, according to a regional television report over the weekend. Instead of propping up prices by buying up corn, Beijing will directly subsidize farmers and stop stockpiling the grain from autumn this year, state-owned Inner Mongolia Television reported over the weekend.

In oil, Dennis Gartman, noted commodity analyst, called for the bear market to continue. He believes there is a lot of crude oil that has been capped and, on the rally, those caps are coming off that production. In terms of U.S. crude, Gartman sees the near-term high-range spot at $42 per barrel. At this range, he feels that consumers will be happy as gas would remain at $2 per gallon heading into the summer. In the long-term, he feels crude will trade at a maximum price of $47. "Those are reasonably good profitable levels" for producers, he noted.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

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