CHICAGO, March 18 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural futures closed mixed in the past week as risk off is the theme of the markets until there is clarity and confidence in the U.S. and EU banking systems, Chicago-based research company AgResource noted in a weekly roundup on Saturday.
The U.S. central bank is likely to hit the pause button and see if anything else breaks following Wednesday's rate decision. AgResource holds that this should offer stability to commodities by late next week.
CBOT corn futures ended higher. China's demand for 2 million metric tons of U.S. corn allowed the CBOT recovery. Importantly, the price break improved processing margins and U.S. corn's export position in the world market.
A build in stocks is probable in 2023, but this cannot be determined in the marketplace until both acreage and early summer weather are known.
A warmer or drier pattern is needed across the Central U.S. beginning in April. Sales will only be recommended on recoveries. Spot cash supplies are tight, and farmers have paused their sales.
U.S. wheat futures rallied 30 to 40 cents this week as the market reconciles deeply oversold technical conditions and a new North Hemisphere growing season. The ongoing U.S. Plains drought and the uncertainty regarding the duration of the Black Sea export corridor lent fundamental support.
Exporter stocks are expected to tighten again in 2023 to 2024 even assuming normal weather, and the broad uptrend line established in 2018 is projected to hold. Wheat futures above 8.00 U.S. dollars require Russian yield loss, but a range of 6.80 to 8.00 dollars is most likely throughout 2023. End user coverage is advised on 10-15 cent breaks. Sales are advised only on recoveries. Initial upside is pegged at 7.20 dollars for May wheat, with support below 6.90 dollars.
Soybean futures collapsed on the week via technical selling and fund liquidation. May soybean started the week under pressure from sharp weakness in financial and other commodity markets, and the decline below 15 dollars triggered additional technical selling. Fundamentally, market news throughout the week was supportive. Early harvest results from Argentina have been disappointing, with some reports dropping into the single digits. Private crop estimates for Argentina have dipped to 25 to 27 million metric tons.
The U.S. National Oilseed Processors Association (NOPA) crush report was also supportive, with NOPA reporting a crush rate of 165.4 million bushels, which was the second largest February crush rate on record.
Additionally, NOPA soybean oil stocks were lower from January, implying that February consumption exceeded production. Long-term support for May soybeans is near 14.50 dollars as U.S. soybean stocks are projected to fall to a 7-year low. ■