Corn— Bearish news: Export inspections of 39 million bushels are behind average as expected. Brazil has increased corn production  estimates again this week. Corns ending stock estimates near 1.9 billion bushels are up 100 million from last month.
Chinese and U.S. hog herd numbers are down and the profit margins remain poor making herd size increase unlikely. China is expected to release 4 million tons of stored corn from government supplies to limit price increases. Chinese corn supplies in storage are estimated at 53 million tons.
Argentine corn exports of 743,000 tons are 7 times last year’s export sales. Brazil has 53 million tons of corn production.
Bullish news: Corn planting has been delayed in 3 of the last 5 years. The 5 year average used for comparison is now later than average. This past week’s rain has delayed planting enough to shift some acres into soybeans.
Energy prices have contributed increased ethanol prices. Demand for gasoline is increasing stimulating increased ethanol demand due to government mandated ethanol additives.
Rumors have a Chinese firm seeking approval to import corn. China is already importing substantial quantities of distiller’s grain left over from ethanol production . Chinese poultry and hog demand is increasing which could increase feed use substantially. The Chinese corn crop is estimated at 150 million tons which will not meet current demand.
USDA reports weekly corn export sales were 1.298 million tons. That is 51 million bushel total and a 64% jump from the prior week.
Bearish news: Soybean export  inspections were down 47 percent from last week at 16 million bushels. South American harvest is moving into world markets. The Argentine dock workers strike has ended. China has taken steps to settle the dispute of soybean oil quality with Argentina.
Soybeans ending stock estimates from USDA were unchanged at 190 million bushels. Brazilian production is near 67.4 million tons up 10.5 million from last year.
Bullish news: Soybean weekly exports sales were 443,800 tons (16.3 million bushels). More than half of the purchases were for new crop beans. China bought nearly all of the new crop beans. Weekly export sales for soybean meal were up sharply at 217,900 tons.
Soybean meal exports from India have dropped 30 percent. Total U. S. export inspections are 10 percent above average. Chinese soybean demand remains strong and Chinese prices have increased 7 cents despite a drop of 2.3 percent in palm oil prices. Last month, China imported 4 million tons of soybeans.
Old crop soybean supply remains tight. Export estimates were increased 25 million bushels which would be a new record of 1.445 billion bushels. The supply to use ratio has increased 6 percent from last year.
Bearish news: USDA winter wheat  condition ratings are 65 percent good to excellent. That is 12 percent above average for this time of year representing a 5 year high.
Wheat supplies are expected to reach 950 million bushels. That is 49 million less than last month’s estimate but still near a record wheat supply.
The Black Sea region, Russia and Europe continue to dominate wheat sales on world markets out selling the United States.
Bullish news: Export inspections of 20 million bushels were 5 million higher than last week. The weekly USDA export sales report showed bookings of 533,400 tons (19.6 million bushels) exceeding market expectations. Wheat exports are projected to increase 40 million bushels to 865 million.
A private firm estimates the Ukraine wheat crop at 18.5 million tons. That is 2.5 million tons less than last year’s 21 million ton crop. The government indicated 3% of the crop had been lost to winterkill. Russian production is also expected to be smaller this year, 55-57 million tons compared to 61.7 million tons last year.
Wheat use for feed stocks is increasing worldwide. This will help rice which will substitute for food use but hurt corn which depends heavily on feed demand to support prices. Soy meal use will also decline if wheat is used for feed because wheat has more protein than corn. World wheat supply estimates decreased a million tons attributed to an increase in feed use.
Bearish news: Industry guesses for increased acreage had been in the 4 to 5 percent range. USDA prospective plantings report came out with a 9 percent overall increase with a 12 percent increase to long grain acres .
The rice stocks report was considerably more than anyone in the trade had estimated. USDA dropped world market price estimates by 15 cents as a result. Market sentiment is that the crop will all be moved and that it will not take much in the way of new sales to tighten supplies.
Bullish news: Weekly export sales posted a strong 71,700 tons. Highlights for the week included a new 30,000 ton sale to Venezuela along with long grain parboiled and regular milled to Saudi Arabia, the United Kingdom. Rough rice markets remain very quiet. The mills have enough stocks for current business.
Rice use estimates increased 8.5 million hundred weight. That figure includes 5.5 million hundred weight for domestic use. Long grain rice use is expected to make up 6.5 million hundred weight of the total. More wheat going into feed use will increase world use of rice.
Bullish news: Weekly Export Sales guesses were 100-200,000 bale range. The actual numbers were better at a combined 236,100 bales. Turkey was the largest buyer. Stocks certified for delivery continue to grow ahead of May delivery notices, and are now at 813,649 bales.
Traders expect USDA to cut projected production from 2009 to 12.28 million bales vs. the previous 12.4 million. The March ginning report says 12.15 million. Traders purchased another 5,000 buy contracts.
USDA lowered the ending stocks estimate 50,000 bales to 3 million bales which include that smaller crop size of 12.15 million bales. Ending supplies would reach half the normal annual use. World ending stock estimates declined to 50.91 million bales. March projections were 51.41 million bales.
Bearish news: Cotton has not responded strongly to recent dollar value declines. This could suggest prices will continue to erode in the short term. If dollar values continue to decline, the price of cotton will increase.
Traders are reluctant to increase buy positions in cotton because prices are assumed to already reflect tight supplies. Cotton prices  are reaching record high levels and traders assume export sales will decline.
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