The first major dump of snow this winter in the U.S. hard red winter wheat region put downward pressure on wheat and corn prices.
Some areas of Kansas, Oklahoma and Texas received up to 60 centi-metres of snow in two blizzards, one late last week and the other Feb. 24-25.
Nebraska was also hit, but accumulations were closer to 30 cm.
Moisture also fell in the corn belt.
It takes about 10 cm of snow to make one cm of water, so the wheat crop will require more moisture.
However, the break in the drought is psychologically important, even though the March to May outlook for the key western areas of Kansas, Nebraska and Oklahoma is for drier and warmer than normal conditions.
Corn and wheat were under pressure all through February as expectations grew that the United States might produce a huge corn crop in 2013-14.
The downward pressure was offset last week by strong oilseed futures.
Worries about dry weather in Argentina and shipping delays because of port congestion and labour unrest in Brazil supported soybean values. Strong U.S. soybean exports were also positive for prices.
Brazil has undertaken a multibillion-dollar port modernization program, which includes plans to privatize many loading facilities that are now required to hire from a central union labour pool.
If privately owned, the facilities could hire from other sources.
There was a short strike Feb. 21 and if more follow in March, it could cause further disruptions in a system where dozens of ships are already awaiting to load even while the Brazilian harvest rapidly proceeds.
That prevents a price-depressing flood of soybeans hitting the market and helps keep customers going to the U.S.
Moisture arrived on the weekend in Argentina, preventing a disaster, but damage is already done. The local Rosario Grain Exchange put the soybean crop at less than 48 million tonnes, down from the U.S. Department of Agriculture’s estimate of 53 million.
The problems in South America were the only counterweight to a lot of price depressing news last week.
The USDA’s Outlook conference issued reports forecasting a return to big domestic corn and soybean crops so long as there is average spring and summer weather, something that has been missing for the last three years.
Reduced seeded area and dryness in the hard red winter wheat crop should lower wheat production, but stocks are far from tight.
The USDA sees corn production up 35 percent, soybeans up 13 percent and wheat down 7.4 percent.
The stocks-to-use ratio for corn is expected to climb to 16.7 percent by the end of the 2013-14 crop year, up from 5.6 at the end of 2012-13.
Soybeans’ ending stocks-to-use ratio of 7.6 percent would be above the five-year average of five percent and the highest in the past seven years.
Wheat stocks remain far from tight, with the ending stocks-to-use ratio for 2013-14 projected at 28 percent, down just slightly from the 28.2 percent expected for 2012-13.
The USDA’s average corn price forecast for the crop year is $4.80, down 33 percent.
The soybean average is $10.50 per bu., down 27 percent.
The wheat price was pegged at $7, down 11 percent.