Cash Grain Markets

exporter doesn’t use their licenses during the specified time frame they are penalized.

The National Weather Service Climate Prediction Center says La Niña has ended, neutral conditions are in place, and El Niño could form during this summer and last through the fall. There is a 50 percent chance the El Niño pattern will begin by JulyAugust-September. This would indicate for now that we could have normal summer weather.

Outlook: Next up on the report schedule are the Prospective Planting and Grain Stocks reports to be released on March 31. The market will anxiously await trade estimates. The Black Sea grain deal expires on March 18. Talks among the parties will be held in the upcoming days. If either Ukraine or Russia objects to extending the agreement it won’t happen.

On March 6, Ag Rural estimated Brazil’s safrinha corn planting was 70 percent complete vs. 80 percent last year.

Weekly export sales were the third highest of the marketing year at 55.6 million bushels and above the highest trade estimate. This keeps total commitments 39 percent behind last year at 1.206 billion bushels. We need to average 22.4 million bushels per week of sales to hit the new export forecast of 1.85 billion bushels which is down 25 percent from last year.

Weekly ethanol production was up 7,000 barrels per day at 1.01 million bpd. Ethanol stocks were a record for this week at 25.32 million barrels and up 545,000 barrels for the week. Net margins improved by three cents to 21 cents per gallon. Weekly gasoline demand fell from 9.112 million bpd to 8.562 million bpd. For the marketing year, gasoline demand is down 5.1 percent from last year.

We are nearing the expiration of the Black Sea grain agreement on March 18. Talks will take place next week and, in my opinion, it will come down to the wire whether an extension will be given. If one party objects, the deal is off.

Comments by Federal Reserve Chairman Powell this week sent a negative signal to the ag markets. He indicated the Federal Reserve may be more aggressive on rate hikes due to strong economic growth so far this year. Traders are now expecting the March interest rate hike to be 50-basis points vs. earlier expectations for a 25-basis point increase. Higher interest rates are usually bearish for ag commodities and increase the carrying costs of grain.

Argentina’s government will allow exporters to postpone using corn export licenses between March 1 and July 31 by up to 180 days due to drought conditions cutting new crop supplies. Normally, if an

This week’s non-farm payroll report sent the U.S. dollar plunging to end the week which supplied the corn market with some profit-taking and a small bounce to break the four-day losing streak. We may be setting up for rangebound trade at a much lower level than we’ve recently seen as we head into the March 31 reports.

For the week, May corn tumbled 22.5 cents to $6.17.25, July dropped 21.5 cents to $6.06.5, and December was 13.25 cents lower at $5.57.75 per bushel.

SOYBEANS — Soybean trading looked supported in the first half of the week but began to fade in the second half of the week after the WASDE report. The new crop November contract suffered the largest loss; but even it was moderate.

The March WASDE report sliced the U.S. soybean crush by another 10 million bushels after lowering it by 15 million bushels last month. Exports countered the reduction with an increase of 25 million bushels to 2.015 billion bushels. Ending stocks fell 15 million bushels back to 210 million bushels. This is the lowest stocks figure in the last seven years. The stocksto-use ratio fell from 5.2 to 4.8 percent, but the average farm price was unchanged at $14.30 per bushel.

World ending stocks were slightly lower than anticipated at 100 mmt vs. 100.28 mmt estimated and 102.03 mmt last month. China’s soybean imports were unchanged at 96 mmt. Brazil’s soybean crop was unchanged at 153 mmt and in line with prereport estimates. Based on their February to January crop year, their soybean exports were 96.5 mmt vs. 77.1 mmt last year. Argentina’s soybean crop was chopped by 8 mmt to 33 mmt vs. estimates for 36.35 mmt. This would be their smallest soybean crop since 2008-09. Based on their April to March marketing year, their crush was pegged at 35.3 mmt, down from 37.2 mmt last year. Argentina’s ending stocks were 4 mmt vs. 6 mmt last year. There is talk in the trade that Argentina’s soybean crop could be sub-30 mmt. Argentina’s soybean crop rating was