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Market Thoughts 3.26.23

Updated: Apr 30, 2023

May corn gained 8’6 this week to close at 643’0, a second straight weekly gain with futures now up 36 cents from the March 10th Strong Buy Signal. May spring wheat actually lost 3’2 on the week to close at 857’4 though futures had fallen all the way to 827 on Wednesday before rallying 30 cents to close out the week. May beans continued their collapse, trading as low as 1405 at one point before settling at 1428’2, down 48’2 for the week. Beans have now posted six straight weekly losses while declining over a dollar from last week’s high to this week’s low.

We were two-thirds right with our thoughts from a week ago as corn and wheat traded steady/higher but soybeans did not join them, continuing instead a massive collapse. Outside markets eased up a bit for a change as everyone that was a bank last week is a still a bank this week, the Fed raised interest rates a quarter percent and stocks closed higher. Fundamental news was supportive to corn and wheat as Commitment of Traders data showed Managed Money now holding a net short position in both commodities. China purchased a bunch more corn and Russia threatened to reduce wheat export quotas. There seems to be a couple things going on with beans. First, soybean oil continues to collapse, now down to lowest levels since 2021 as it follows energy prices and questions about biofuels demand. Second, rumors that the Brazilian soybean crop is much larger than expected as U.S. export sales and shipments have fallen off sharply. And all of this while Managed Money still has a sizable net long position in beans with plenty of selling left to do.

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