Markets are down hard this morning with contract roll and much better weather in South America.
Today is the roll day for March futures, all long positions need to be move or else face delivery. The market is putting the squeeze on anyone that was holding a long position in the March futures. Anyone holding a long position at the close of trade today will be forced to deliver.
U.S. Ethanol production for the week ended Feb 19 totaled 658,000 bls per day (down 27.8% vs a week ago, down 37.6% vs a year ago); Stocks were 22.8 mil bls (down 6.2% vs a week ago, down 7.8% vs a year ago); Corn use 66.5 mil bu vs 92.0 mil last week and 95.7 mil needed to meet USDA projections. Cold weather has hampered plants the last couple weeks and slowed consumer driving. Many plants reduced production greatly due to the cold weather and natural gas issues.
***A very significant change in the weather for Southern Brazil and Argentina.***
The current forecast for Southern Brazil and Argentina has little rain, but moving out 5-7 days has a major storm coming in on a breakdown of the ridge. The Ridge is going to move North putting drier weather where Brazil needs it most. The forecast could prove to be a bust, but this is the map for now, and we have to respect significant changes in the weather. This forecast has 2 inches of rain coming when Argentina needs it most.
If you haven’t sold much new crop corn, today may be the day to do it. I am not expecting this market to continue the selloff, but we could hit some technical triggers that move this market lower. Heading into the March 31st planting intentions I would suggest being 50%+ sold on new crop corn. I expect 93-94 million corn acres on that report which could push markets lower. This is “IF” we have a favorable spring for planting. If weather is good, we could easily see 94-96 million acres.
Have a Safe Day!