COMMENTARY 3/23/18

CORN

UP 1

Lots of bearish news around today with our nine cent trade range, but we DID close higher at the end.  Talk of tariff issues, government budgetary concerns, and 199A issues all were likely contributors. Export Sales were decent but towards the low side at 57.9 vs expectations of 55-83 mill and 18.7/needed per week.  Big buyers were S Korea at 18 mill,  Japan 10, and Taiwan at 8 mill bu.  The low end of the range seemed a little skimpy compared to last week’s export sales of almost 100 mill.  BA Grain Exchange trimmed Argentine estimate another 2 MMT to 34.0 and Informa is now at 31.5 million.  Harvest is 13% complete, up 5 from last week and compares to 8% last year.  Early yield talk has them down 15-16% from last year. SA weather is still is being watched close.  Lower US acres are beginning to be suspected for next Thur’s report.  Despite big demand for old corn, due to Argentina drought, new crop demand IS sluggish. New crop sales are 16% behind last year.  Less than 90 mill acres will get interesting….and make yield VERY important.  With the passage of today’s big spending bill, the 199A “Grain Glitch” was approved by Senate this am and signed by Pres Trump this afternoon!  That item appears to be corrected.  Producers can retroactively sell grain to private companies without a 20% reward to cooperatives.  Thanks for your support and positive attitudes as our officials sorted through their discourse.  

 

 BEANS              

DOWN 1

Media hype tried to take a jab at US stock markets and CBOT this am as the board dropped 20 cents on its lows before regaining consciousness.  In response to new US tariffs on aluminum and steel, China is now considering a 25% tariff on 128 ($3 billion worth) of US import products (accounts for only 14% of their import total).  Some US products being eyed for “tariffing” are a 25% duty on US pork, 15% on US steel pipe, US fruit, and US wine.  Note that two of these four ARE food products. -AND so far the list does NOT include beans! (another food staple).  Also, a 15% import duty on top of the 30% tariff currently in place could be added to imports of US denatured ethanol.  China needs our beans and if they don’t think so initially, they may soon change their mind as there aren’t enough beans in the world market to satisfy their needs.  Export Sales, like corn, were in range but at the low end at 27.9 vs expectations of 26-51 mill bu.  China was the buyer of 11.9 mill.  The BA Exchange cut Argentina’s Prod estimate another 2.5 MMT from last week to 39.5.

 

Wheat

UP 4

All eyes are on crop conditions and Plains weather!  Export Sales picked up at 9.7 vs expectations of 4 -11 mill and 10.0 needed per week, with the recent drop in futures.  Big snow storm coming in from IA will bear watching as well this weekend!