Grains Outlook - An Excerpt from CRB'S Futures Market Service
SOYBEANS—May soybean prices are moving sideways, moderately above last month’s 5-month low. Bearish factors include (1) the -28% m/m decline in Feb China soybean imports, (2) the prospect of record soybean crops in Brazil and Argentina, the two biggest soybean growers and exporters after the US, and (3) the USDA’s Mar 10 hike in its global carry-over estimate. Bullish factors include (1) the USDA’s Mar 10 cut in its US production and carry-over estimates, and (2) firm foreign demand as US soybean exports are up +33% y/y for the marketing year starting Sep 1. As of Mar 2, large specs further reduced their small long position to 12,140. Soybean summary: 2009-10 crop 3.359 bln bu (+13% y/y), 2009-10 US carry-over of 190 mln bu (+38% y/y), 2009-10 global carry-over of 60.67 MMT (+44.4% y/y).
CORN—May corn prices are consolidating just above last month’s 5-month low. Bearish factors include (1) the USDA’s Mar 10 hike in its US and global carry-over estimates, and (2) Feb 19 estimate of a +2.9% increase in 2010 US corn planted acreage and its projection for a record 2010 US corn crop of 13.16 bln bu. Bullish factors include (1) the USDA’s Mar 10 cut in its US corn production estimate, (2) speculation that spring floods may delay corn plantings, and (3) record US ethanol production in Dec of 24,424 bbl., indicating increased corn demand. Large specs as of Mar 2 added to a large long position of 113,591. Summary: 2009-10 crop a record 13.131 bln bu (+8.6% y/y), US 2009-10 carryover 1.799 mln bu (+7.5% y/y), global 2009-10 carry-over 140.15 MMT (-4.3% y/y).
WHEAT—May wheat prices are trading moderately above September’s 2-3/4 yr nearest-futures low. Bearish factors include (1) the USDA’s Mar 10 hike in its US and global wheat carry-over estimates, (2) slack foreign demand for US wheat as US wheat exports from Jun 1 to Mar 4 are down -23% y/y, and (3) uncompetitively priced US wheat compared to other foreign suppliers. Bullish factors include (1) the USDA's Jan 12 cut in this year’s US winter wheat acreage estimate to 37.097 mln acres, the smallest planted acreage since 1913, and (2) the USDA’s Feb 19 estimate for a -9% cut in 2010 US wheat acreage. As of Mar 2, large specs cut their large short position to 38,955. Summary: 2009-10 crop 2.216 bln bu (-11% y/y), US 2009-10 carry-over 1.001 bln bu (+52% y/y) and a 22-yr high, global 2009-10 carry-over of 196.77 MT (+19% y/y).
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