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3 Big Things Today, March 8

Beans, Grains Slightly Lower Overnight; Brazil Corn Growers May Be Sitting on Record Crop.

1. Beans, Corn Slightly Lower Ahead of WASDE on Concerns About Feed Use

Soybeans and grains were modestly lower in overnight trading ahead of tomorrow’s World Agricultural Supply and Demand Estimates (WASDE) report and on worries that feed use will decline after several Asian countries limited poultry imports from the U.S.

Several traders are staying on the sidelines in anticipation of tomorrow’s WASDE report, while others are looking at whether the amount of corn and soy meal will be affected after an outbreak of avian influenza in Tennessee.

South Korea has banned all poultry and egg imports from the U.S., while other countries have limited imports from Tennessee or the county where the disease was discovered. The Department of Agriculture said it is seeking to ensure the outbreak was limited to one farm with about 73,500 chickens that have reportedly been culled.

Soybean futures for May delivery fell 2½¢ to $10.22¾ a bushel overnight on the Chicago Board of Trade. Soy meal lost $1.40 to $329.90 a short ton, and soy oil rose 0.15¢ to 33.88¢ a pound.  

Corn futures for May delivery lost 2¢ to $3.74 a bushel in Chicago.

Wheat futures for May delivery fell 2¾¢ to $4.53¾ a bushel overnight. Kansas City futures declined 2¢ to $4.70½ a bushel.

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2. Brazilian Corn Output Seen at Record Amid Favorable Weather

Researcher FCStone yesterday raised its estimate for Brazil’s corn crop to a record 93.3 million metric tons, up from a prior outlook for 91.5 million tons.

Analysts ahead of tomorrow’s WASDE report forecast output in the South American country at about 2 million metric tons lower than that, which may be leaving some investors scratching their heads.

Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines, Iowa, said in a note Wednesday morning that production of that caliber would boost Brazil’s exportable supply to 32 million to 33 million tons, up by 17 million to 18 million from a year earlier.

No major weather problems are being reported in Brazil. Commodity Weather Group said in a report that rains will linger in the center west and center south of the country.

Some rain showers in the next 10 days may cause isolated flooding in southern Rio Grande do Sul, and a dry pattern will affect northeastern Brazil in the next month, but that should only impact sugar and coffee.

The benign weather pattern is giving credence to the idea that Brazilian growers may actually produce a record corn crop, Pfitzenmaier said. That won’t do U.S. corn prices any favors, and he said he recommends selling on price increases.  

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3. Dry Weather, Strong Winds on Tap For Much of U.S. on Wednesday

More dry weather and strong winds dominate the overnight weather maps from the National Weather Service.

A red-flag warning is still in effect for a chunk of land where Nebraska, Colorado, and Kansas meet, and another stretch from south-central Oklahoma to northeastern Missouri, according to the NWS.

As has been typical the past few days, low humidity (in the 17% to 20% range), warm weather, and strong winds gusting to near 35 mph will make for tinderbox-like conditions, the agency said in a report this morning.

A high-wind warning has been issued for much of southern Michigan and northern Indiana that will last until 6 p.m. tonight. Westerly winds will reach about 40 mph sustained by mid-morning and reach up to 60 mph this afternoon, the NWS said.

The winds likely will knock down limbs and power lines and make driving conditions difficult.

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