Both corn and beans were anxious to get out of the gate this morning and when the bell rang, each leapt forward. Beans were able to get further down the track than they have on previous attempts, bit alas, a false start was flagged, and everyone had to return to the staging area. If you recall, this is eerily similar to what occurred a week ago today. Both corn and wheat now appear to be so distraught over the call that they are headed back for the barn, but the bean jockeys have not given up the race just yet. Even though the opening gap has been filled, May futures are still above the January peak at 14.33, and a couple consecutive closes above that mark, and we could into a new race.
While we do not know if it will aid or detract from this great bull quest, tomorrow morning the USDA will provide updated production and supply/demand estimates, and here again, are the number the trade is looking for; Domestic corn ending stocks 1.460 billion (-42 mil.) beans 117 million (-3 mil.) and wheat 838 million (+2mil). Brazilian bean production is expected to be up slightly to 133.2 MMT, but corn reduced (.5) to 108.4 MMT. The average estimate for Argentina beans came in at 47.5 (-.5) and corn at 47.00 (-.50). For global ending stocks, corn is expected to drop 2 MMT to 284.5 MMT, beans down 500k to 82.9, and wheat up just slightly to 304.5 MMT.
China has now released import numbers for the first two months of 2021 (they combine the two due to the disruption of the Lunar Holiday) and it turns out beans slipped a bit compared to the prior year. 13.41 MMT were unloaded, down from 13.51 MMT a year ago. Keep in mind that last year they were setting new records. We of course know that the stepped up imports are meant to feed the rapid rebuilding of the hog herd in that nation, but of course, if you want to get food on the shelves quickly to try and stem price rises, there is nothing like importing the finished animal, and that appears to be the name of the game. During those two months, imports of meat totaled 1.6 MMT, which was an increase of 27.6%. That should put some pork, and beef and chicken on the fork.
It would appear that funds have finally decided to look for greener pastures and have lightened up their long positions in corn and beans. During the week ending March 2, Large specs sold just over 24,000 contacts of corn and 25,000 contracts of beans. They liquidated lesser amounts of oil, meal and cotton, but bought a combination of 9,000 contracts of wheat. At this juncture, they are long pretty much every ag market with the exception of feeder cattle.
Looking at the macros to begin the week, energies, metals and financial instruments, with the U.S. Dollar and equities higher, no doubt encouraged by another $1.9 trillion soon to be arriving in the U.S. economy mailbox.