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Farm Futures - Weekly Market Recap


Soybeans win on all counts

Futures focus on exports, weather and charts.

Weather, demand and price charts all swayed price movements as the second half of March got underway. Only soybeans found strength from all three factors.

Drought in Argentina continued to provide support for both corn and soybeans as estimates of production plummeted.

The Rosario Grain Exchange cut its forecast of soybean production in Argentina more than 250 million bushels below USDA’s last forecast, while the Buenos Aires burse is nearly 185 million below USDA. For corn, Rosario is more than 150 million bushels below USDA’s March 8 forecast. The Buenos Aires exchange is around 75 million below USDA. 

Corn didn’t get as much traction from the drought, in part because Brazil’s status is uncertain. Weather there appears to be improving, which could lead to another big crop planted behind soybeans and harvested in June. 

Still, the Argentine situation appeared to be one factor driving strong exports of both corn and soybeans. Corn numbers remain stellar, topping 100 million bushels last week. Sales have picked up dramatically after a slow start. Brazil still has inventory left over from its huge crop harvested last year. But soybeans are dominating shipping capacity, leaving corn stuck in storage as farmers wait for higher prices.

Soybean business also remained strong, hitting almost 50 million bushels. The total included nearly 19 million bushels purchased by Chinese buyers, who started buying more aggressively recently. That helped alleviate some, but not all, of the concerns that China could retaliate against imports due to U.S. tariffs on solar panels, steel and aluminum products.

Argentina is the world’s largest export of soy products and the drought is already boosting exports of U.S. soybean meal, which are running at their second-best level in history for this time of year. Members of the National Oilseed Processors Association reported record crush for the month of February, further cementing the soybean demand story.

Processors likely used less corn for ethanol as production fell this winter after reaching record levels in December. Processors are paying more for corn, which hurt profit margins. Soybean plant profits, by contrast, are soaring. 

The news flow helped soybeans shrug off concerns about rising acreage. May futures held after giving back half their February rally, then reversed higher and moved out of that downtrend. New crop futures kept to their uptrending channel, despite acreage concerns. 

Corn by contrast sold off to the bottom of its channel off Jan. 12 USDA report lows, which could provide support headed into the countdown for USDA’s March 30 planting intentions report.

Wheat was pretty much skunked on all three factors. Forecasts for wetter conditions on the southern Plains hammered hard red winter wheat, which couldn’t hold March lows after a series of bearish reversals on price charts. Exports were part of the problem too: Sales dropped to 6 million bushels of old crop, with the new crop book also looking thin.


Corn basis weakened sharply in the eastern half of the Midwest as traffic on the river system began moving again when floodwaters receded. Shippers appeared to have all the corn they needed for the time being, so they slashed bids. That weakness spilled over to ethanol plants too.

Still, opportunities to hedge old crop inventory should pay off for those seeking basis appreciation. Barge freight rates for May and June are lower, and the futures market offers carry as well. Some ethanol bids are 25 cents higher for June, an opportunity to lock in some gains. 

Unshipped export sales are running at record levels, which should also keep the cash market strengthening, but continuing to move old crop inventory is prudent. New crop still is not at profitable levels for the average grower, and likely depends on the March 30 USDA reports for traction headed into planting.


Soybeans are trying to find their legs. Seasonal charts suggest futures could chop around into April, when better chances for rallies unfold. In years with rising prices over the fall and winter the market normally makes new highs during the spring. 

Growers should be crunching the numbers on new crop hedges to see where they can still make a profit even if yields suffer a hit. Covering some of this risk with call options is one alternative. That’s what the “smart money” appears to be doing, with heavy new interest noted in out-of-the-money November calls.

Implied volatility, which can influence the relative cost of those options, is still somewhat modest for those strikes, particularly compared to levels that could be seen during the growing season.


Wheat remains on the clock, as traders wait for news about potential yields. Weekly crop ratings out in a few states during the first half of March were mixed, though yields on the southern Plains still look challenged.

USDA begins nationwide ratings April 2, but the market isn’t likely to make a judgement until the agency releases its first survey of farmers and their fields May 10.

Unless the situation is really dire – with spring wheat threatened, too – wheat could have trouble moving higher into harvest. Fields in the Black Sea region appear to be in good shape headed into the spring part of the growing season. Another big crop could continue to choke off many export markets to U.S. sellers.


Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.