Talk about dashed dreams. Little more than 24 hours ago, bulls were full of optimism and vigor as they charged into a new month, but by the time we reached the close, it was more of a sense of despair. What happened? As always, there were a number of reasons attributed to the decline, ranging from a strong dollar, a lack of export interest, and desire by investors wanting to allocate some capital over to the equity world, to name just a few. Whatever the rationale/excuse, it did end in a lower close, and in the case of corn, an outside lower reversal for the day. All is not lost by any means, as we have seen prices stabilize overnight, and in the case of wheat post a nice recovery this morning, and on top of that, we have the first export sales reported in the daily system in what seems forever. Japan has purchase 175,000 MT of corn for the 2021/22 crop year. Overall, the big three just remain in a congestion pattern. I certainly do not want to give you the impression that we should become complacent as these markets remain in a very overbought position, and if investors, i.e., Large Specs, really do go out in search of greener pastures, we could witness a decent washout, but that said, neither is there much reason to extend higher. I suspect we will be confronted with little more than sideways chop and volatility at least until we remain the March supply/demand reports next week and more likely the acreage and grain stocks estimates at month’s end.
It is now estimated that the accumulated lineup of ships at Brazilian ports waiting for soybeans has reached 19 million tons, setting a new record. Needless to say, it is going to require more than a few weeks to clean up this backlog. They loaded out 2.6 MMT during the last week of February. As we reported yesterday, bean harvest in that country is estimated to be 25% complete, which was an increase of 10%, and yield have been respectable. Dr. Cordonnier raised his estimate 2 MMT to 132 million. He left his corn estimate unchanged at 105 MMT. In Argentina, corn harvest has just begun, with a little less than 1% taken out. 40% of the crop is estimated to be reaching maturity. Dr. Cordonnier left estimates for this country unchanged, with corn at 45.5 MMT and beans at 46.
Earlier, I had touched on the strength in the U.S. Dollar, which has tried to extend gains once again this morning. We appear to be struggling a bit now, but do take note that we have pushed through the resistance at the 91-cent mark and moved to within striking distance of the highs posted at the beginning of February. I continue to believe this market acts as if we are establishing at least an intermediate bottom, and if it continues to climb, should create headwinds for the commodity sector.
