3 Massive Issues As we speak, March 8, 2023

1. Wheat, Soybeans Lower Ahead of WASDE Report

Wheat and soybean futures were lower overnight while corn was unchanged ahead of today’s World Agricultural Supply and Demand Estimates (WASDE) report.

The U.S. Department of Agriculture is expected to raise its forecasts for corn and wheat stockpiles at the end of the marketing year while lowering its outlook for soybean inventories.

Investors also will be watching the USDA’s South American crop-production outlook.

Analysts polled by Reuters said they expect the agency to lower its production forecasts for both soybeans and corn in Argentina while leaving forecasts for Brazilian output mostly unchanged.

Also weighing on prices this morning is optimism that the Black Sea Grain Initiative, the agreement that has allowed agricultural products to flow from Ukraine, will be renewed.

The deal was brokered by the United Nations and Turkey in July and implemented at the start of August. It was renewed in November and is again up for review.

UN Secretary-General Antonio Guterres is in Ukraine today to meet with President Volodymyr Zelenksy to discuss extending the initiative.

Guterres said in a speech in New York earlier this week that “the prospects for peace keep diminishing” and that escalation of the war in Ukraine continues.

Wheat futures for May delivery fell 7¢ to $6.91 a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 3 1/2¢ to $7.95 ¾ a bushel.

Soybean futures for May delivery fell 3 1/4¢ to $15.12 ¼ a bushel. Soybean meal was down $1.40 to $486.40 a short ton and soy oil added 0.13¢ to 58.79¢ a pound.

Corn futures were down 3/4¢ to $6.33 ½ a bushel.

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2. USDA Expected to Raise Stocks Forecasts For Corn, Wheat

The USDA’s estimates for corn and wheat ending stocks likely will rise while soybean forecasts will probably fall in today’s WASDE report. 

Corn inventories at the end of the 2022-2023 marketing year on Aug. 31 likely will be projected at 1.308 billion bushels, according to a Reuters poll.

That would be up from February’s outlook for 1.267 billion bushels but down from the 1.377 billion bushels that were in storage at the end of the previous marketing year, government data show.

Soybean stocks at the end of August likely will be pegged at 220 million bushels, the poll said. That would be down from the prior forecast for 225 million bushels and well below the previous year’s 274 million bushels.

Wheat inventories at the end of the grain’s 2022-2023 marketing year on May 31 probably will be seen at 573 million bushels in today’s report, the survey said, up from the 568 million bushels projected in February. Ending stocks last year were reported at 698 million bushels.

Traders also will be keeping an eye on the USDA’s South American crop-production estimates.

Soybean output in Argentina likely will be seen by the agency at 36.7 million metric tons, according to Reuters. That would be down from the February outlook for 41 million metric tons and well below last year’s 43.9 million metric tons, the government said.

Corn output in the South American country also will be projected lower at 43.4 million metric tons, the poll said, down from the previous forecast for 47 million tons and last year’s output of 49.5 million metric tons.

Brazilian soybean production, meanwhile, likely will be forecast at 152.9 million metric tons. The USDA last month projected 153 million metric tons. Growers in the world’s largest exporter of the oilseeds produced 129.5 million metric tons last year.

Corn output will be seen at 124.9 million metric tons, Reuters reported, down slightly from 125 million tons the previous month but up from the 116 million metric tons produced last year.

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3. Winter Weather Forecast From Montana Through Iowa

Winter-weather advisories have been issued for much of eastern Montana, all of South Dakota and parts of central Nebraska, according to the National Weather Service.

As much as 6 inches of snow are expected to fall in central South Dakota starting tomorrow, the NWS said in a report early this morning. Roads will become slippery during the storm.

In central Nebraska, freezing drizzle overnight likely left a glaze of ice on roadways, the agency said. Caution while traveling is advised.

Winter-storm watches will take effect in northern Iowa and southern Minnesota starting tomorrow morning and lasting late into the night, the NWS said.

From 5 to 7 inches of snow are possible along with strong winds that may produce blowing snow.

“Travel could be problematic,” the NWS said. “Patchy blowing snow could significantly reduce visibility.