** 6:30 AM CST CBOT Prices: May soybeans are up 2.75 cents at $10.2525, May corn is up .5 of a cent $3.7825, and May Chi wheat is up 3.50 cents at $4.545.
** AgResource AM Grain & Oilseed Comment: Good Morning! CBOT grain values have tried to recover from Monday’s lashing on a decline in Plains wheat crop conditions and end user bottom picking. Funds were huge sellers on Monday as they desired to bank some profits heading into the end of the month and quarter. A two-sided trading session is expected today as the market tries to consolidate and think ahead to the March 30th Stocks and Seeding Report.
CBOT open interest (OI) did not fall very much amid the reported Monday’s large fund selling. Corn OI was down 4,393 contracts, soybeans were down 3,224 contracts with wheat off 11,629 contracts.
In overnight dealings, May corn has traded more than 26,000 contracts, May soybeans more than 11,000 contracts, and May Chi wheat more than 25,000 contracts. The grain volume was considerable overnight.
There continues to be strong talk coming out of Washington that President Trump is preparing $30-60 Bil of trade tariffs against China following a US 301 trade investigation that started last year. No tariff announcement date has been set, but the White House is hearing considerable resistance to the proposed China tariffs from all sectors of US industry– including agriculture.
As was the case in steel/aluminum, President Trump has listened to industry and modified the initial proposal, but whether that will occur with China is uncertain? China is likely to retaliate against the US, but their choice of commodities is unknown. The pending Chinese tariffs are likely to limit CBOT rallies – until more details are known.
Kansas wheat crop conditions fell to just 11% GD/EX, the lowest rating on record with conditions in TX/OK also in decline at historical lows. The poor ratings raise the need for additional moisture in the coming weeks. Unfortunately, the forecast is offers just a few spits of moisture and remains arid looking forward for the next 10-14 days.
The Argentine forecast is drier than recent days with rains pushed northward into the northern third of the country on the weekend. Rain totals across the southern 2/3’s of Argentina look to range from .1-.5” with the coverage no better than 50% of the crop area. Such dryness will continue to tug corn and soybean crop estimates lower. Commercial traders are now discussing an Argentine soybean crop of 38-41 MMTs.
CBOT traders fret about President Trump’s proposed tariffs against China at a time with funds are holding large market length. However, further Argentine crop reductions loom and the Plains forecast has gone back arid. Don’t sell the break as $10.00 May soybeans and $3.70 May corn offer strong support.
** GFS 10 Day Forecast: Parched for the Plains
