By Kirk Maltais
--Wheat for May delivery fell 1.6% to $6.24 3/4 a bushel on the Chicago Board of Trade Wednesday as more rain falls in the U.S. Plains.
--Corn for May delivery rose 0.4% to $5.53 1/4 a bushel.
--Soybeans for May delivery rose 0.7% to $14.32 3/4 a bushel.
Eat Your Wheaties: Wheat futures dropped, reversing yesterday's rise as the U.S. Plains get more precipitation. For traders, the decline makes wheat a favorable choice as the primary feed ingredient for livestock this year. "Wheat has reached a spread (vs corn) where it is becoming the main starch ingredient in cattle rations thru the summer," said AgResource, adding that feedlots in the U.S. plains "are securing massive amounts of HRW wheat to feed from April 1st onward." Wheat futures dropped 6.6% in the past month, while corn futures are essentially flat - making wheat more attractive for feed usage.
Supply Crunch: Soy futures found support in both the global tightness in vegetable oil supplies, as well as expectations next week's prospective plantings report won't change the already tight outlook for U.S. ending inventories. "Soybeans bounced as soyoil futures resumed its uptrend and soymeal remained little changed," said Dave Marshall of Top Ag. "With soy product values underpinning board crush margins, soybeans were able to rally." Soymeal closed up 0.1% to and soyoil closed up 1.1%.
Waiting It Out: Grain traders continue to be unwilling to commit to big moves ahead of next weeks' annual prospective plantings report from the USDA -- which will give the grain market a new look at farmer plans for planting row crops, said Doug Bergman of RCM Alternatives. "With that said, the trend was higher last fall, we've now seen consolidation for the last couple months, so if the trend continues, it will be higher."
Brisk Sales: With the USDA last week confirming sales of nearly 4 million metric tons of U.S. corn to China, grain traders surveyed by The Wall Street Journal are expecting the amount of corn exports in the agency's weekly report to show a rise. Traders forecast corn sales will total anywhere from 3.8 million tons to 5 million tons for the week ended March 18. That's significantly higher than the 1.23 million tons confirmed sold for both marketing years in last week's report. Meanwhile, soybean sales are expected to be weak, ranging from anywhere from 100,000 tons to 625,000 tons, according to traders surveyed.
Selling Strategy: U.S. farmers hoping to take advantage of higher prices for row crops this year may be more likely to sell on the spot market instead of via contracts, said Curt Covington, senior director institutional lending with AgAmerica. The higher risk profile comes as farmers reap rewards of higher prices in the second half of 2020, said Mr. Covington. "Farmers today are looking at profits on their statement and asking 'what am I going to do with this?'" he said, adding that many are trying to make up for the weakness of previous years by selling more of their crops outside of previously-negotiated contracts - at hopefully higher prices.
Forecaster Flop: Daily ethanol production fell 49,000 barrels to 922,000 barrels per day for the week ended March 19, according to the EIA. Analysts surveyed by Dow Jones had forecast production to rise as much as 81,000 barrels from last week's report. "The unexpected drop in production is slightly bearish for CBOT corn futures," said Terry Reilly with Futures International. Meanwhile, ending stocks rose 469,000 barrels to 21.8 million barrels for the week, the agency said. This uptick also defied analyst forecasts, who had expected inventories to fall by as much as 1.1 million barrels for the week.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
--The USDA will release its quarterly hogs and pigs report at 3 p.m. ET Thursday.
--The USDA will release its monthly livestock slaughter report at 3 p.m. ET Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
March 24, 2021 15:35 ET (19:35 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.