COMMENTARY 2/26/16

Occasional cool fronts drift across S Brazil and Paraguay over the next 10 days.  Storms with above normal accum of 2.5″ to 5.0″ are expected. The long hot periods and the soaking rains should be over for Argentina today.

St Louis river level ~EASING  ~ at 16.2′ and forecast to be 13.2′ by  3/2.

 CORN

DOWN 1

The USDA is projecting a 1.98 bbu 16/17 Carry Out.  This is nearly 100 mbu OVER the average guess of 1.89bbu, in a trade range 1.37-2.72.   The projected  stocks to use ratio of 14.4% would be largest since 17.4% back in 05/06 when farm prices averaged $2.00.  Exports were only increased 50 to 1.7 bbu from the latest 15/16 forecast.  In South Am, the Brazil crop is getting larger as Agroconsult raised their estimate 1.7 MMT to 87.3.  The first crop is up 600 K to 28.5 and the second crop up 1.1 to 58.8. BA Exchange held Argentina’s crop at 25.0 but increased their acreage total from 5.69 million ha to 5.88.

 

BEANS     

DOWN 4

Brazil’s harvest keeps clicking along, coupled with a dwindling US export need and a firmer dollar.  The market paid little attention to the  slightly smaller Carry Out for 16/17  at 440 mill bu.  Exports, however, are expected to rise 135 mbu to 1.825 bbu. The BA Exchange maintains their Argentine estimate at 58 million.  Brazil’s Agroconsult expects China’s 15/16 imports to rise 6 MMT to 84.0, while the USDA is at 80.5.  Mato Grosso harvest is now 53% complete vs 54% last year and a 3 yr avg of 57%.

 

WHEAT          

DOWN 2

The USDA is expecting a slight increase in 16/17 Carry Out. Ending stocks are thought to be higher at 23 mbu to 989 million.  There was a 3.6 million acre planting decline whichwas mostly offset with 2.3 bpa increase in expected yield and exports are expected to increase 75 mbu to 850 million bu.  French soft wheat crop rated 94% Good/Very Good, unchanged from a week ago and 4 points higher than last year.  USDA says poor Ukraine emergence could reduce their winter grain area by 20%.