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Commentary
Yesterday’s USDA reports were mostly neutral to the market as numbers were within the range of expectations. The most noted numbers were a slightly larger corn acreage and higher soybean stocks than the average guess, but not enough to create any major reaction in my opinion. One number that did stick out was a projected 14.8% increase to US canola acres, taking them to 2.69 million. This was driven by the predicted increase in US biofuel production. Outside markets were under pressure today, mainly the energies, and this weighed heavily on the ag sector, specifically in morning trading. The wheat complex was pressured from wetter outlooks for the Plains and seemingly ignored the fact that total US acres this year will be the lowest since 1919. Better than expected retail sales data for February drew managed money into the indices today, and this pressured corn, and wheat the most. Beans were double digit losers early today but fought back near unchanged near the close. Fund longs are defending their positions in beans for now in old crop and one can debate the merits of that amid no new Chinese demand and harvest winding down in Brazil while increasing in Argentina. Good Friday on tap which means a holiday shortened week. No new trade recs as of this report. But we will be posting some second quarter trade ideas into weekend.
Trade Ideas
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Options-N/A
Risk/Reward
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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