After the initial weakness, the wheat market enjoyed another round of fund short covering yesterday while the corn and beans markets continued to bleed out a few more bulls. Weather concerns appear to be the stimulus for wheat, not domestically per se but rather the dry conditions in over in Russia and Ukraine as they begin to emerge from the winter months. It is interesting to note that this is not unlike a year ago at this time as extreme dryness in Russia was a real concern but of course it was the Russian takeover, I mean invitation rule Crimea and the heightened concerns over a full scale war between Russia and Ukraine that got the wheat market hopping. I guess Putin mysteriously disappearing for ten days does not carry as much weight. On a side note, last week I was thinking about creating a new set of children’spuzzle books titled “Where’s Vladimir?” In addition to this, it was around a year ago at this time that predictions of an El Nino forming were circulating, which just added to the overall uncertainty and here again this year we have several meteorological organizations again predicting the onset of an El Nino. Of course we know now that the fears of last year never really came to full fruition, particularly pertaining to crop production but there is certainly no assurance we can avoid problems twice in a row. This is one of the reasons that I maintain a neutral to positive bias towards the wheat market.
Export inspections were disappointing for corn but in line with expectations for beans and wheat. For the week ending March 12th we loaded just 28.9 million bushels of corn. This was down 38% from last week and 13% below the 10-week average. With the increased projection of 1.8 billion bushels we will now need to average 41.4 million per week moving ahead and thus far the weekly average has been 28.8. Soybean inspection set a post harvest low at 21.5 million bushels. This was only 6.5% below last week but 55% below the 10-week average. China accounted for 44% of the beans loaded. Wheat inspections bounced back nicely this week to 19.1 million bushels, which was up 38% above last week and 36% above the 10-week average. This at least keeps us within striking distance of the 22 million average needed to reach the USDA target of 900 million.
The NOPA crush number for February did not provide any help for the remaining bean bulls either. For the month we squeezed 147 million bushels, which was about 1.5 million below expectations. Overall we continue to run above last year’s pace but not to the extent that the USDA has projected.
While too early to create concern just yet, spring activity is getting off to a slow start in the south as Texas reports that corn planted stand at just 11% versus an average of 25% for this time of year. Early wheat ratings are mixed with Texas showing 51% good/excellent, Colorado 49%, Kansas 41%, Oklahoma 40%, and Arkansas at 28%.While soft this morning, these markets just appear lifeless and outside of possible additional short covering in wheat, we could just continue to drag into the reports on the 31st.