CORN Futures price Outlook
Corn prices retreated from their recent 2-1/2 year high. Bearish factors include (1) USDA's Mar 10 hike to its 2010-11 global carry-over estimate to 123.14 MMT from a Feb estimate of 122.51 MMT, (2) the DOE's report that US ethanol inventories rose +3.9% in the week ended Mar 4 to 19.9 million bbl, their highest level in 8 months, and (3) USDA's prediction that US corn acreage this year may rise +4.3% to a 4-yr high of 92 million acres. Bullish factors include (1) the possibility of increased Chinese purchases of US corn after China's Vice Minister of Agriculture said it's "too early to say" if China has enough corn to meet demand this year, and (2) the very tight U.S corn supply situation with the stocks/usage ratio matching the 7 decade low of 5.0% posted in 1995-96.
Weekly Corn Exports (week ended Mar 3): 1,204.9 MT; 2009/10 (Sep-Aug) cumulative exports are -0.9% y/y.
Fundamental Outlook-Medium-term Bullish-Corn prices fell back from a 2-1/2 year high on long liquidation pressure, the rise in ethanol inventories, and the USDA's hike in its global carry-over estimates. However, the trend remains bullish as the USDA predicts US corn supplies may be restricted for at least the next year or two as the corn market tries to recover from the very tight U.S. supply situation. The corn stocks/use ratios are extremely tight with the US stocks/use ratio of 5.0% matching the 7-decade low posted in 1995-96 and the world stocks/use ratio at 14.6%.
SOYBEANS Futures price Outlook
Soybean prices are consolidating near the recent 2-1/2 month low, down from last month's 2-1/2 year high. Bearish factors include (1) USDA's hike in its 2010-11 global carry-over estimate to 58.33 MMT from a Feb estimate of 58.21 MMT as it raised its Brazil corn harvest estimate for this year to 70 million tons from 68.5 million tons projected last month, (2) reduced foreign demand for US soybeans after the USDA reported that inspections of US soybeans for export for the week ending Mar 3 tumbled -46% from the previous week, and (3) USDA's prediction that US soybean acreage this year may rise by +0.8% y/y to a record 78 million acres. Bullish factors include (1) the recent decline in the dollar index to a 4-month low, which may boost US grain export prospects, (2) strong Chinese demand for soybeans after Jan China soybean imports rose +26% y/y to 5.14 MMT and that total 2010 China's soybean imports surged 29% y/y to a record 54.8 MMT, and (3) USDA's Dec 10 hike in its US soybean export forecast to a record 1.59 billion bushels.
Weekly US soybean exports (week ended Mar 3): 732.7 MT; 2009/10 (Sep-Aug) cumulative exports are up +2.6% y/y.
Fundamental Outlook-Bull market correction -Soybean prices are in correction mode on concern the recent surge in energy prices may dampen soybean demand, the prospects of record US acreage this year, and improved weather in South America. However, prices remain supported by the USDA's cut in its U.S. carry-over estimates and by strong Chinese demand. The US stocks/use ratio is tight at 4.2%, but the world stocks/use ratio is near average at 22.8%. Read More... For the latest updates PRESS CTR + D or visit Stock Market news Today
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