Rice Bearish news: There is little fresh fundamental news available to give the market direction. Estimates suggest a 5 percent or greater increase in the 2010 U.S. rice acreage.
The recent weakness in rice futures may alter some planting intensions. The international markets remain oversupplied and inexpensive.
Upside potential is limited until the crop is planted. Estimates about U.S. and world production are premature.
Trading volume has been very light with a daily average of just 565 contracts. Thailand 100 percent Grade B rice is quoted at $525 per ton. Vietnamese 5 percent is $385 per ton. That price is below the minimum export price set by the government. Long grain rice values dropped 57 cents. The worldwide market remains soft because demand is weak.
Bullish news: The weekly USDA export sales report 61,200 tons last week. This included a combined 25,000 tons of milled rice to Turkey the balance long grain rough to Mexico and Central America. Export shipments for the week totaled 82,500 tons. Venezuela accepted 29,000 tons of long grain. Another 14,000 tons of long grain rough went to Central America. Open interest increased by a few hundred contracts. The increase in U.S. rice acres maybe limited if prices continue to decline.
Soybeans: Bearish news: Malaysia has delayed its 5 percent biodiesel blend mandate until next year. That means more palm oil available to the world market. China cancelled 65,000 tons of U. S. soybean deliveries. Palm oil prices dropped another 1.25 percent.
The soybean crush report showed February crush at 153.8 million bushels and below market expectations. Soybean meal stocks went up to 700,463 tons instead of down to 555 thousand as expected. USDA’s weekly export sales report was expected to reach 300,000 to 700,000 tons. The actual figure was 319,900 tons, just barely in the range. Export inspections of 29 million bushels were down 10 percent from last week.
Soybean planting intentions have increased 2 percent up to 79 million acres. Argentina’s soybean crop is 9 percent harvested and the strike could end soon.
Bullish news: The drought in southern China reduced rapeseed production about 500,000 tons. Soy oil stocks were 3.293 billion pounds, well below trade estimates. China took delivery on 283,900 tons of United States shipments, which is 8.7 million bushels. China is on track to import a record 45 million tons of soybeans from the United States. Soybean export inspections are up 12 percent for the year.
Argentine dock workers remain on strike limiting exports out of Argentina. Brazil has only sold 36 percent of this year’s soybean crop. South America is holding soybeans in hopes of higher prices. Slow shipments out of South America are helping export sales of U.S. beans.
Poultry production is increasing and so is demand for soy-meal as feed. Cattle and hog herd size is low and prices are starting to be affected.
Cotton: Bullish news: The pull back in dollar values relative to other currencies supports cotton prices. Economic conditions in the European Union are improving. The European market improvement will use more cotton. U.S. cotton supply will remain tight despite the increase of cotton acres.
Bearish news: Cotton USDA weekly export sales were bearish, with net sales of only 117,700 RB. The Census Cotton Consumption report showed a small drop in the seasonally adjusted February use, to 13,340 bales per day.
Cotton acres expected to increase by 1 million to 1.5 million over last year. Cotton planting in Texas has started.
Income levels in the United States are unchanged. This implies that employers are not adding jobs. Demand for fabric will remain below average near term in the U.S. market.
Corn: Bearish news: Ethanol futures were down 1 cent to $1.557. Argentina estimates 20.5 million tons of corn production but USDA reports 21 million. South Africa continues to increase corn production estimates.
Corn planting intensions have increased 3 percent to 89 million acres. That is the second largest corn planting intension in 50 years. Traders expect corn markets to break out of the current consolidation pattern to the downside. Export inspections near 38 million bushels are 7 million below last week. Total inspections for the year are 5 percent behind the five-year average.
Bullish news: A new survey suggests U. S. corn acreage would only be 87.3 million for 2010. That is on the lower end of published estimates. Ethanol subsidies have been extended. USDA reported weekly export sales at 606,800 tons. Export shipments were 1.16 tons and 10 percent above the 4 week moving average.
Wet weather is limiting corn planting. If it stays wet into mid April, that will be bullish for corn and bearish for beans. Rising input costs may limit corn planting. Corn planting in most of the south is 10 percent behind average.
Wheat: Bearish news: Only 189,200 tons of wheat export sales were hard red winter wheat, the rest was Soft red spring wheat and durum wheat. Crop condition ratings are improving but bearish for prices. Weekly export inspections 14.776 million bushels down 5 million for the week.
South American countries are buying less expensive Russian wheat. Egypt and the Mediterranean area are also buying Black Sea wheat reducing export potential for U. S. wheat. India has a bumper wheat crop and potential for wheat exports.
Bullish news: USDA’s weekly export sales report showed combined old and new crop bookings of 519,200 tons. Export shipments were 76 percent larger than the previous week, at 453,000 tons. Wheat planting intentions are down 11 percent. This year’s wheat crop is on track to be the smallest number of acres planted since 1970. Japan intends to import 3 percent more wheat.