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Grain producers are itching to get started with field work because of the abnormally warm winter this year. Seventy degree temperatures in much of the Midwest the past few weeks has given everyone spring fever. The unpredictable weather also heightens concerns regarding growing conditions this season. While the April-June long range forecast is for normal moisture, above normal temperatures are predicted as well. Although weather will be a factor in the weeks ahead, supplies are ample with the USDA putting ending stocks at 2.320 BB and raising world stockpiles 3.1 million tons to 220.7 million. For now, the bulls may be content to sit on the sidelines until the Planting Intentions Report on March 31st.
Soybeans have met a headwind from expectations for a big crop in Brazil, dwindling exports, and expectations of the Fed hiking interest rates. Looking at Brazil, the USDA increased their production 4.0 million tons to a record 108.0 million tons. World stockpiles are up 2.4 million tons to 82.8 million. Meanwhile, U.S. ending stocks grew 15 MB to 435 MB from February. Regarding exports, the pace of shipments has fallen 65 percent since November and could decline as much as 83 percent if history serves as an indicator. Because of increasing supplies and dwindling exports, it will take adverse weather during the growing season to bring the bulls back to the table.
Spring like weather is bringing the wheat crop out of dormancy early. This means that the crop will need moisture on a timely basis and makes it vulnerable in the event of a late freeze. In other news, the USDA lowered their ending stocks estimate for wheat 10 MB to 1.129 BB. World stockpiles were increased 1.3 million tons to 249.9 million. Although stocks are abundant, a late crop freeze could cause significant damage at this stage of development.
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