Corn, soybeans and wheat all faced substantial drops yesterday on Chicago where funds reduced their long positions on profit taking.
Traders are betting USDA will report historically large corn and soybean acres in the agency’s highly anticipated prospective plantings report, which it will release this morning.
In add, at the end of the quarter, the funds proceed as usual with reallocations of assets in their portfolios.
However, markets are also cautious as the current tight balance sheets make each million-acre switch substantial.
Consequently, milo and spring wheat acres are also both being watched closely.
The USDA Prospective Plantings report, indeed, will provide the first official estimates on corn, bean, spring wheat and milo acres for 2021.
To note that traders will step straight from report day into end-of-week balancing as markets will be shut on Good Friday.
In this context, corn and soybean prices fell more than 1.75%, while some wheat prices losing as much as 2.5%.
Also energy futures slumped lower, with crude oil dropping 1.75%.
Diesel fell nearly 1.25%, and gasoline facing losses of around 0.4%.
On Wall St., the Dow slid 104 points lower to 33,066 even if remains near all-time highs.
US treasury yields, on the contrary, moved higher, which some see as a signal for impending inflation and higher interest rates.
The U.S. Dollar firmed moderately.
The Suez Canal blockage has officially come to an end.
More than 140 ships awaiting passage through the canal had can moved forward finally.
However, disruptions to global shipping may take several weeks to return at normality.
Indeed, Ocean freight markets are still working to sort out the post-Suez blockage impacts, with disruptions and delays still cropping up across front end freight.
Inside grains market, corn prices was eroded throughout Tuesday’s session, despite private exporters announced to USDA the sale of 100,800t of corn for delivery to unknown destinations during the 2020/21.
Traders, indeed, brace for USDA’s announcement of what will likely be one of the largest U.S. corn plantings on record.
Analysts are expecting USDA to show massive corn planting intentions, with an average trade guess of 93.208 million acres.
In add, today, also worth monitoring is the weekly round of ethanol production data from the U.S. Energy Information Administration.
Last week, EIA reported a decline to just 922,000 barrels per day, which was the lowest weekly total in more than a month.
Soybean prices fell in tandem with other grain prices.
Analysts offered an average trade guess of 89.995 million acres.
Wheat prices sank significantly lower with double-digit losses.
Spillover weakness from corn and soybeans applied additional headwinds, as did a strengthening U.S. Dollar.
Kansas, the No. 1 winter wheat production state, has 50% of its crop rated in good-to-excellent condition.
Quality ratings for No. 2 production state Texas dropped a point, in contrast, with 28% rated in good-to-excellent condition.
In Argentina, recent rains may be too late to help the country’s corn and soybean crops, but they will help boost wheat plantings of course.
On European market the excellent 2021 production outlook and declining demand continue to weigh on prices.
Despite a small rebound for a small part of the session due Algeria’s tender, European grains eventually gave in to pressure from Chicago and weak fundamentals.
The tension on corn is easing with the good progress of the second wave of Brazilian plantings in recent days.
Rapeseed once again fell significantly, especially in the 2020 harvest, in the wake of other oils.
Indeed, a sharp slowdown in Chinese demand is notably reported, while the resumption of palm production in Malaysia is confirmed.
In the 2021 harvest, however, the decline was limited by the outlook for very strained balances to come and fears related to low temperatures next week, as we enter the early flowering period.
In the Black Sea basin, there’s ongoing pressure on old crop wheat markets as markets look at the increasingly short export window to fill any old crop demand and few new buyers coming in.
A survey of Ukrainian farmers indicates that 18% plan to reduce their 2021 corn acres after experiencing drought conditions.
That could lead to an acreage drop of around 14% this year.
The Russian government has raised the export tax on sunflower seeds from 30 to 50% of the customs value with the minimum threshold of $ 320 / t.
The tax will come into effect on July 1, 2021 and will be in effect until September 1, 2022.
Sunflower oil exports will also be subject to a floating tax as of September 1, 2021.
This tax will amount to 70% of the difference between the base export price set at $ 1,000 / t and the market reference price.
Australian local markets continue to see limited liquidity.
This is due to slow by commencement of planting activity and trade continuing to focus on execution/logistics from prior sales.
Australia’s weather bureau reported earlier today that the latest ENSO cycle has shifted away from La Niña conditions for the first time in six months.
However, long run forecasts are continuing to call for some improve rainfall outlooks into planting on the east coast.
On the international trade scenario, offers for Algeria must be communicated no later than tonight.
In view of current prices, Europe should be chosen with origins which could be in competition between France, Germany and Poland.
Jordan bought around 60,000 t of feed barley.
