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USDA has probably raised more questions than providing answers. They project corn plantings at 88.0 million acres, down 2.141 million from 2017. This was well below expectations and is considered bullish. This sets the market up for a sizeable move if weather becomes a factor this spring. Meanwhile, stocks as of March 1st are a record high of 8.888 BB, up 266 MB from a year ago. This is indicative of slack demand. In other developments, concerns about a trade war between the U.S. and China are easing. Current thinking is that they will return to the table to negotiate their differences on trade. Exports slipped last week with inspections of 45.4 MB. We must ship 57.5 MB each week to reach USDA’s target of 2.225 BB which may be a bit optimistic. Looking at the funds, they lightened their long position 235 MB reducing it to 1.1 BB.
USDA projects planted acres of soybeans at 88.982 million, down 1.160 million from 2017. This is the first time in 35 years that soybean acres have exceeded corn. However, the report was below expectations and is a bullish figure. On the other hand, stocks as of March 1st are forecast at a record 2.107 BB, up 368 MB from a year ago. This reflects the slack demand. Traders continue to discuss weather in Argentina, but it is becoming old news as most expect their soybean crop to be less than 40.0 million tons. Some guesses are that it could be 39.5-38.0 million tons. Export inspections were slightly higher last week at 21.4 MB, but the overall pace of shipments continues to decline. Looking at the funds, they trimmed their longs 35 MB last week to 700 MB.
USDA projects all wheat acres to rise 1.3 million to 47.3 million, while winter wheat is up a modest 12 million to 32.7 million. The jump in all wheat acres came mostly from spring wheat rising 1.6 million to 12.6 million. Meanwhile, stocks as of March 1st are forecast to be down 165 MB to 1.494 BB. In other developments, there was a 1-2 point bounce the crop rating in Kansas, Oklahoma, and Texas last week, but they are looking at their worst crop in years. Exports continue to haunt the market with inspections only 10.0 MB last week. The funds show no sign in changing their bearish stance as they increased their shorts 60 MB to 300 MB last week.
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