Special Market Update
Grain Market Commentary
Wednesday, March 3, 2021
by Tiffany Weitzel, Originations Merchant, The Andersons
Multiple days continue to see corn and soybeans trading both directions. The market is eagerly waiting to see what the upcoming March WASDE report will tell us. Currently we sit with the 4th tightest US corn carryout to use ratio since 2012. Usually this report has little impact but like everything else this year, expect the unexpected. Outside companies are reducing their corn crop estimates coming from South America due to delayed second crop plantings. Will it matter? Per usual the ball is in Chinas court. Estimates have 1-3 mmt ton loss in Brazil. If Chinas demand stays the same this could have a huge factor on the value of US corn. There is still competition with Argentina as they offer values below the US. Ethanol use was reported down 16 mbu from a month ago, but the good news is Ethanol production should recover as temps rise after suffering from below freezing temperatures that disrupted production. Usage should also increase as the temperatures continue their warmup. May corn sees resistance at 5.535 but closed lower than 5.365 support, the next support level is at 5.255.
After setting multi year highs last week, soybeans are seeing on again off again support from dry weather in Argentina, as well as to much rain in during Harvest in Brazil. Brazil’s harvest is at behind their average 40% harvested at only 25% complete. Still expecting the largest harvest in history, ironically at the slowest pace in over ten years.
Nass crush reports came in right at expectations. The USDA should feel pressure to lift that number in the March WASDE report. That means there needs to be reduced exports or increased exports to make everything balance.
May Soybeans have support at 13.70 and resistance at 14.3025.
Wheat trades back and forth as well, one day up on decreased US conditions plus weakness in the dollar then down again on improved weather in the ten-day forecast. May wheat also closed below the 6.5475 support leaving 6.385 the next level of support.