The volatility market has seen the past few months, does not appear to be over just yet.

The US market, Friday put a positive day on a very volatile week.

In fact, despite corn prices jumped 3% higher yesterday, after spilling to three-week lows, and the soybean prices climbed 1.5% higher and also the wheat prices, in most contracts, was up around 0.5%, the only real winners of the week are soybean and oilseed complex.

Reduced export demand following higher ocean freight rates pressured Pacific Northwest (PNW) HRS and HRW export basis and Gulf HRS and SRW export basis for April and May deliveries.

Consequently, Chicago SRW was down 1.1% for the week, and KC HRW was down 1.2%.

Inside the numbers, CBOT soft red winter (SRW) May futures lost 7 cents week on week, to end at $6.53/bu, while KCBT hard red winter (HRW) futures prices fell 7 cents to close at $6.26/bu.

On the contrary, MPLS spring wheat was up 1% as it tried to keep acreage from leakking to soybeans.

Consequently, MGE hard red spring (HRS) futures prices gained 6 cents, week over week, to end at$6.45/bu.

About corn, despite a heroic rally effort on Friday, CBOT corn futures fell 2 cents to end at $5.45/bu.

That’s for front month May.

Really, corn prices rosed mainly on rising prices in the energy complex as OPEC and allied producers will not increase production in April, citing uncertainty surrounding the economic recovery from the pandemic as the main deterrent from expansion.

Energy futures, indeed, made major inroads, with WTI crude oil jumping 7.74% higher week on week, to accross reach $66,26 per barrel.

Also Brent gained 5,15% up on the week colsing at $69,54 per barrel, and so, also Diesel and gasoline followed this trend.

However, we note that new crop December corn futures were up 11 cents for the second week in a row, setting new life of contract highs on Friday.

Meantime, soybean futures were up 1.8% this week, posting new life of contract highs.

In fact, CBOT soybean futures added 26 cents to close the week at $14.30/bu.

Also soybean oil continued to rise, up another 186 points (3.7% for the week), with CBOT soybean oil futures ended the week at $5,18/bu.

While meal, was the weaker of the products, with a $3.20/ton drop.

All summ so, the soy complex has regained some firmness, as appear that there is a oversold on export soybeans.

In add, US domestic soybean meal demand continues to run well ahead of USDA projections, as only export meal showing signs of backing off.

In this context, traders remain watchful of weather trends in South America – particularly in Argentina, where 30% of the country’s soybean acres could face enough dry weather over the next 10 days, and this, is adding to along continue expectations to see US and global grains supplies, moving lower.

This week, the Buenos Aires Stock Exchange has withdrawn five points from its “good to excellent” soybean ratings, for a ratio now estimated at only 10%, against 44% last year!

Corn ratings were also cut by five points, to 25%, half the rate estimated a year earlier!

US and global stocks are likely, indeed, to fall when USDA releases its next set of data next week.

About this, in fact, ahead of the March World Agricultural Supply and Demand Estimates (WASDE) report from USDA, analysts expect to see a modest reduction in 2020/21 world corn stocks, with an average trade guess of 11.190 billion bushels.

Analysts also predict 2020/21 world soybean stocks will see a slight month-over-month decline, moving to 3.037 billion bushels.

About wheat, analysts expect the agency to show 2020/21 global wheat stocks inching slightly higher month-over-month, moving to 11.184 billion bushels.

Looking the week’s events and facts, at the start of the week, UDSA’s grain export inspection report held mostly positive data for traders to digest.

Corn volume saw marked improvement and made it to the upper end of trade estimates.

Soybeans also notched week-over-week gains and exceeded analyst expectations.

Wheat volume, on the contrary, continues to disappoint, with another round of weekly declines, sliding below the entire range of trade guesses.

While, in the midle of the week, the weekly export sales and shipment data released by USDA, covering the week through February 25, had both some bearish and some bullish data to digest.

In deed, although soybean and wheat volume increased week-over-week, totals were still below their prior four-week averages.

And although corn sales fell to a marketing-year low, shipments re-wrote the record books last week.

About wheat sales we have seen 219,200 MT, up from 167,700 MT the previous week.

That brought the total wheat export commitments to 23.998 MMT, 3% above last year at this time.

Compared to the USDA projected 20/21 export total of 985 mbu, that would put shipped and unshipped sales at 90% compared to the average pace of 94% for this date.

About corn, report indicated bookings were the worst of the marketing year at 115,900 MT.

New crop sales totaled only 38,800 MT.

Commitments to “unknown” shrank 1.767 MMT, mostly due to destination changes made instead of new purchases.

The USDA total of shipped and unshipped export sales (i.e. commitments) is 122% of year ago at 59.123 MMT.

Commitments are 90% of the full year WASDE forecast.

They would typically be 70% by now.

About soybean, report showed 334,000 MT of old crop sales through February 25.

Another 199,400 MT was sold for new crop bookings.

Total soybean export commitments for the MY now total 60.149 MMT.

That is 98% of the USDA full year forecast, compared to the 5-year average pace of 83% for this date. Shipments are moving along, at 86% of that projection vs. the 68% average.

Meantime, China has developed a new five-year plan to increase food security for the world’s most populous nation.

Really, the Chinese typically don’t want to be the market, where their activities drive prices and than they are working to get out of such situations.

That brings us to their new plan, announced Friday where in addition to raising price support levels for wheat and rice and encouraging expansion of corn production in 2021, there are a number of longer term goals, that we must note:

1)Create agricultural belts of sufficient size for efficient modern farming practices;

2)Develop “high quality” farmland that provides consistent yields regardless of drought or excessive rains;

3) Continue to boost the recovery of hog production while also increasing beef and mutton;

4) Keep total crop acreage stable and ensure that land is not idled or illegally converted to non-ag use;

5) Intensify research on core ag technologies and genetics;

6) Diversify imports of major ag products;

7) Accelerate development of (Chinese) multinational ag businesses;

8) Develop overseas supply chains.

This, may will move operators in different choices in the next future, menwhile, the CFTC report has just showed managed money cut 16,803 contracts net long in soybeans.

That meant they were still net long 155,561 contracts (futures + options) as of March 2.

In add, also trimmed 12,605 contracts from their net long position in corn, taking it to 348,546 contracts as of March 2.

Meantime, however, they adding 4,893 contracts to their net long in CBT wheat last week (to 31,803 as of March 2), even if pruned another 1,484 contracts from their much larger KC HRW net long, taking it back down to 51,724 contracts.

European markets have been more esitant, with the excepition of rapeseed.

On March 5, indeed, the United Nations (UN) Food and Agriculture Organization (FAO) predicted global wheat production in 2021 would reach a record 780 MMT on a return to trendline production in the European Union (EU).

About this, France saw improved winter wheat quality ratings this past week, according to France Ag, which estimates that 88% of the crop is in good-to-excellent condition.

That’s a point higher than a week ago and far above year-over-year ratings of 64%.

The country’s barley crop is also in solid shape, with 84% rated in good-to-excellent condition.

Taras Vysotskiy, Ukraine’s deputy economy minister in charge of agriculture, expects record wheat production in 2021 on favorable weather forecasts and mild winter conditions.

Ukraine is expected to export up to 22.0 MMT of wheat in 2021, up 26% from last year, if realized.

Meantime, rapeseed continues to soar on solid fundamentals ending the week with a ninth consecutive increase!

Strong demand from crushers and the melting of European and Canadian stocks are indeed bringing strong pressure to this market several months before the new harvest.

Loadings in Canadian ports also remain very dynamic and risk straining the country’s end-of-season balance even further.

In this context, Matif wheat May futures fell 1 €/t to close at 228,25.

Matif corn June futures gained up 1,25 €/t from last week to end at 221,25.

Matif rapeseed May futures jumped 27,75€/t from last week to close 518,50.

Watching next week’s market, we’ll have the full five day schedule this week.

The US weekly Export Inspections report is expected on Monday, along with a few scattered state crop condition reports.

USDA’s monthly Crop Production and WASDE supply/demand estimates are scheduled for Tuesday morning.

The weekly EIA ethanol production and stocks report will be out on Wednesday, and USDA’s weekly Export Sales data will be released on Thursday morning at 7:30 am CST.

March grain and oilseed futures expire on Friday, although most of them are already dying from lack of volume and open interest.

Daylight savings time begins on Sunday morning, March 14 as everyone rolls their clocks forward an hour (except for a few locales that don’t observe it).

On the international scene, to note, Algeria purchased 1.2 million bushels of animal feed corn, likely sourced from Argentina, in an international tender that closed Thursday.

The grain is for shipment in mid-April.

South Korea purchased 4.8 million bushels of animal feed wheat from optional origins in an international tender that closed earlier yesterday.

The grain is for arrival in August and September.

The Philippines purchased 2.0 million bushels of animal feed wheat from optional origins in a tender that closed Thursday.

The grain is for shipment between March and May.

We have seen only one flash export sale over 100.000 t, reported this week by USDA.

Japan, indeed, took 6.9 million bushels of corn for delivery to Japan during the 2021/2022 marketing year.

The Baltic Dry Index jumped 5% from last week to close at 1,779.

U.S. Dollar Index increased from last week’s 90.88 to end at 91.94.

The dollar rose to a three-month high overnight after Asian and U.S. stocks fell on rising U.S. Treasury bond yields.

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