AgMaster Report - Wednesday, March 3


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The CBOT has morphed into a “supply Bull” from a “demand Bull” as S/A supplies come on line -at lower prices than the US – cutting into mkt share! But the S/A problematical weather is still an issue with N Brazil too wet for harvest & Argentina too dry for proper crop development! The attention will shift from old crop to new crop – as there is absolutely no margin for error in the upcoming US row crop season! Stocks – severely depleted by El Nina in S/A & record demand from China – have reached 6-7 year lows & desperately need to be replenished by an ample US Harvest! We see sideways to up – from now until early summer until we have a better handle on US production & yield


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As you can see, May Corn has drifted into a sideways trading pattern. The upside is limited by waning exports as S/A supplies – newly on-line & cheaper than the US – have encroached on our export share! The downside is limited by extreme supply uncertainty as the “jury is still out” on the ultimate size of the drought-ravaged S/A crop – as well as the upcoming US crop! One bullish wildcard is the expected dramatic recovery of the US economy – energized by widespread vaccination & the passage of the Covid Relief Package! Much elevated ethanol demand should be a welcome by-product! The USDA issues very important reports this month – the 3/9 WASDE & THE 3/31 PLTG & QTLY STOCKS! Some argue the Corn has already gone up far enough – following its $2.00 rise since mid-2020! However, it wasn’t that long ago -that we had $8.00 corn! And if El Nina invades the US in a few months, then we’re too cheap today!!


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May Wht closed up 16 cents yesterday on the back on lower crop ratings for the plain states – issued by the USDA Mon afternoon! Previously, the contact tickled the 690 level off the bitter cold snap which we all suffered thru a few weeks back! But today, the mkt is back lower – being essentially range-bound – like its sister mkt – corn & beans! The mkt will need better exports & help from C & B to resume its up!!

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