Karl Setzer, previously authored this column until he changed jobs, will be alternating writing it with Angie Setzer, his colleague and wife, going forward.

Very few changes were made to balance sheets in the March supply and demand report. The USDA now pegs U.S. carryout at 1.84 billion bushels for corn, 900 million on soybeans, and 1.055 billion on wheat. None of these were out of line with trade expectations.

Global ending stocks were estimated at 309 million metric tons on corn, 106 million on soybeans, and 271 million on wheat. The global wheat number was the only one outside trade estimates, as it was 1.5 million tons higher than expected.

Commodity values have struggled recently with a lack of fresh news. What news there has been really has not offered much in the way of support, either. This has allowed commodity values to drift sideways, which is not uncommon at this stage of the marketing year – hence the term “winter doldrums.”

As it has been for several weeks, relations between the United States and China continues to dominate trade. Recently we have heard the announcement that both countries were nearing a finalization of the details that would again allow free trade between them.

China has even stepped in and booked soybeans from the United States. At first this alleviated market pressure and allowed market values to rally, mainly soybeans. Cooler heads have now prevailed with this trade dispute, and buying interest has faded.

While China did book 10 million metric tons of soybeans initially, since then sales have been nonexistent. Trade is now becoming worried that the immediate sales were little more than a good-faith measure, and additional demand will be sparse.

This is not difficult to believe and, in fact, is quite likely. This is especially the case with China being offered cheaper soybeans out of South America.

One source of support for U.S. soybean sales is the strained relations between China and Canada. Chinese officials reportedly found “hazardous pests” in canola vessels from Canada, which caused them to be rejected. China has since suspended canola imports from Canada.

The real reason for this action by China is more likely in retaliation for the political issues that have arisen between the U.S. and China in regards to trade disputes. While it seems like a stretch, the suspension of canola imports could lead to a quicker resolution to the Chinese-U.S. dispute.

Soybeans have taken some support from transit issues in Brazil. The much talked-about BR-163 highway in Brazil has flooded, causing muddy conditions that are preventing truck movement. In recent years much of this road has been paved, with little left that is dirt.

The initial reaction to this story was that it would bring buyers to the U.S., but it now appears as though any disruption to Brazilian exports will be minimal.

Another story in the market recently has been U.S. acreage intentions. The USDA is expecting farmers to seed roughly 92 million acres of corn and 85 million in soybeans this year. These numbers are being heavily contested, especially given recent weather conditions.

Heavy rains and flooding have taken place in the Delta and Deep South. Corn planting has all but concluded in Texas, but there are now concerns that fields will need to be replanted. Rains have also prevented fields from being seeded in other regions.

A greater concern is the weather in the Corn Belt. Heavy snowpack and cold temperatures have combined to prevent any early fieldwork from taking place. This is on top of the limited fieldwork that was done last fall. Given these conditions, it is not only likely we will see delayed plantings this spring, but also possible we will not see higher corn planting take place.

Add to this a new-crop price ratio of roughly 2.4:1 – which means it takes 2.4 bushels of corn to equal the value of 1 bushel of soybeans – and higher corn plantings become less of a reality.

The ongoing winter conditions have been beneficial to the interior cash market, however; producers across the Midwest currently could not move much inventory even if they wanted to. Add in less-than-stellar prices and the incentive to make sales is even lower.

As a result, many processors have been forced to pay significant premiums for deliveries. In some instances, this has the interior cash market at levels that are higher than the rail and export market.

Karl Setzer is Director of Risk Management for Citizens Elevator in Charlotte, Mich. His market commentary can be found on Twitter by @ksetzergrains and online at www.citizenselevator.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources are believed to be accurate.