It was mostly quiet in the grains overnight. The big story is that the USDA Ag Outlook Conference as we will get our first official planting intention estimates.
2016 USDA Ag Outlook Conference Average Estimates -- Bloomberg
Corn acres 89.689; range 88.3-92.5; production 13.719; 16/17 ending stocks 1.891
Soybean acres 83.345; range 82-85; production 3.821; 16/17 ending stocks 516
Wheat acres 52.374; range 51-56; production 2.015; 16/17 ending stocks 1.005
2016 USDA Ag Outlook Conference Average Estimates -- Reuters
Corn 89.6 million
Soybeans 83.3 million
Farm Exports at 125 Billion
Corn price of 3.45/bu with acres are 90 million vers 88.0 million in 2015
Soybean price at 8.50/bu with acres at 82.5 million vers 82.7 million in 2015
Wheat price at 4.20/bu with acres at 51 million vers 54.6 million in 2015
Since the recent slide in the U.S. dollar, helping boost grains, bounced off of support in the 95.0 region and has since pushed back to higher levels. Gapping higher on the chart two days after setting the low of 95.280, a recovery back over 97 has taken place with resistance in the 97.8 to 98.2. The U.S. dollar recovery is starting to show its impact on exports, with sales being released this morning as following.
Wheat range 200,000-400,000; actual of 387,900 for 15/16 and 98,300 for 16/17
Corn range 700,000-1,200,000; actual of 934,400 for 15/16 and 131,800 for 16/17
Soybean range 300,000-700,000; actual of 328,300 for 15/16 and 300 for 16/17
Soymeal range 100,000-250,000; actual of 171,700 for 15/16 and 900 for 16/17
Soyoil range 5,000-20,000; actual of 3,200 for 15/16
Sales came within expectations this week, but the bar has been set fairly low for those expectations. A higher U.S. dollar, lower crude oil, and low foreign currencies, in general—we have low demand.
While I continue to hammer on the bearish news and bearish forecast, I am still on the same page that the longer-term outlook for corn is bullish, just not as bullish as many would like. One point of positive news is that corn and soybeans have been able to hold support levels recently, even in the face of South American harvest pressure and the collapse of crude oil. Patience will likely be the key, as it has been.
Row crops continue to chop around in their respective ranges but ultimately go nowhere on the charts. Both seem ready to challenge their support levels, potentially today. This may be a time for renewed selling on corn put options, however a better chance may be later for those sales if support fails to hold today.
Soybeans have been able to hold support along their uptrend drawn from the contract low but is now beginning to get squeezed by down trend resistance as they intersect each other in early March. A breakout at that point is possible, my fear is it may be to the downside as South American harvest will be near the 50% complete mark by then.
Grains are feeling some pressure after the open, likely from the stronger dollar, weaker crude, and bearish estimates out of the USDA. I am not looking for a strong bearish reaction as these estimates are mostly in range of independent estimates, however more acres still equates to potentially more bushels to sell down the road.