This week’s action:
Corn May up 11 at $6.45
Beans May down 46 at $14.30
KC Wheat May up 12 at $8.48
Feeders April flat at $194.65
Fats April down .65 at $163.125
Hogs April down 2.675 at $77.15
Corn Dec23 flat at $5.61
Beans Nov23 down 38 at $12.74
KC Wheat July23 up 12 at $8.34
We are approaching 30-40% of the corn seasonal marketing window. Next week is the March 31 Planting Intentions report.
Both old and new crop soybeans remain under pressure amidst a record Brazilian harvest. So far through March, old and new crop beans have lost about 85 cents. New crop beans have only ended the day in the green twice since March 7.
It may seem like corn has dropped dramatically from winter values (it has) but both the May and December contracts are only off about 10 cents during the month of March. It appears we are carving out support levels. The drop in prices has been helpful for export demand. Announced sales over the last 10 days has been over 110 million bushels. This has helped perk up nearby basis values.
New crop KC wheat has been trading in nearly a dollar range this month and ends the week up 15 cents so far in March. July futures closed the week squarely at its 50-day moving average. Prices rallied on Friday after comments from Putin surrounding the export corridor. If the July contract can close above the $8.33 level early next week, look for follow through support.
Below are areas of support/resistance for corn and soybeans.
In the “on no” department, below is an overlay of Dec13 futures and Dec23 futures.
Weekend rains are expected along the Nebraska/Kansas border over the weekend but will not hit southwest Kansas wheat acres. Parts of Oklahoma and Texas received rain this week. Spotty showers across the corn belt over the next two weeks could limit fieldwork.
Don’t give up hope if you are in an extremely drought stressed area. Below is a year over year comparison of the Southwest U.S. You’re always a day closer to your next rain.
The FED followed through with a 25 bps rate hike this week, bringing the base rate to 4.74-5.00%. This is amid scrutiny as more and more banks look vulnerable to a potential liquidity crunch in the event multiple depositors want to withdrawal funds. A handful of banks have already failed, notably Silicon Valley Bank and Credit Suisse. This week, the German Deutsche Bank is in the spotlight as contagion fears grow. The cost to insure their debt has more than doubled over the last three weeks as investors fear the bank may own a significant amount of *negative rate* bonds. It is reported U.S. banks are sitting on $1.7 trillion dollars in unrealized bond losses. It is estimated $7 trillion of the $17 trillion in deposits at domestic US banks are not insured by FDIC. It’s not a problem until it is. Why keep your money in a bank when US Treasuries are around 4% and CD’s are less than 2%??
Fannie Mae projects U.S. home prices to decline 4.2% and 2.3% in 2024.
Congress took aim at TikTok this week, questioning its CEO about ties to the Communist Chinese Party. There is rare bipartisan support to either find US ownership of the app or a complete nation-wide ban over spying concerns. Look for this story to gain steam until either of those resolutions are met.
Something that probably means nothing:
Samsung is building a chip plant outside Austin, TX. The project was announced in early 2021 at a cost of $17 billion.
It is already reported to be at least $8 billion dollars (almost 50%) over budget due to inflation of building materials and labor. Completion is not expected until 2025.
Enjoy your weekend!