Soybeans and wheat closed modestly higher, while corn closed unchanged to ½ cent lower in the May contract.  Tomorrow we do not expect any major market reactions ahead of this week's USDA report.  We are likely to see increased farmer selling in the days/weeks after Wednesday regardless of price action.  Whether we see a bullish, bearish, or neutral corn figure bushels need to be moved as temperatures heat up and bin quality becomes a larger concern. 

Below are analyst estimates for Wednesday's supply/demand report.

Production       Average           Jan. USDA      2008

Corn                13.081             13.151             12.101

Yield               164.5               165.2               153.9

Soybean          3.35                 3.361               2.967

Yield               43.8                 44                    39.7

Ending Stocks             Average           Feb USDA      2008-2009

            Corn                1.713               1.719               1.673

            Soybean          0.195               0.210               0.138

            Wheat              0.971               0.981               0.657

Normally, this report is not as important as the end of the month prospective plantings and quarterly stocks report, but we are all aware of the resurvey.  Estimates are for a tighter soybean supplies due to an increase in exports and crush.  However, larger South American production will continue to weigh on soybean rallies, especially as their harvest progresses.  The corn market has the most anticipated numbers on the report, production and exports.  The optimism comes from thoughts of decreased supplies due to late harvested corn and low test weights.  However, we do know that exports need to remain very firm in order to reach the current USDA projections. 

There does not appear to be any major changes to the wheat figures.  The demand side for wheat continues to be poor.  The ending stocks and stocks to usage ratio will remain high figures.  Exports have been weak due to US wheat not being competitive on the world market.  It is important to note that winter wheat acreage is down sharply, but first we need to work through current supplies.

Overall fundamentals have not changed significantly since January and this broad outlook needs to remain fresh in producers that have significant amounts of unsold grain.  Meanwhile, the market appears to continue with its choppy action until the report.  Please call us if you have any questions.

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