Market News

Another down day for soybeans and corn

Soybeans were lower on fund and technical selling, with May falling to a multi-month low. Export demand remains slow as Brazil holds a price advantage, even with recent cuts in production estimates due to yield results. The crop is much smaller than initially expected because of widespread planting delays and weather issues during some key phases of development. Reports of more U.S. imports of Brazilian beans due to that price advantage didn’t help. There’s also been talk this week, but no confirmation, of big purchases of Brazilian beans by China. There have also been cuts for Argentina, but the crop is still much larger than last year. The Rosario Grain Exchange has the crop at 49.5 million tons, compared to the last guess of 52 million. The USDA’s next round of supply and demand estimates is out March 8th, while CONAB’s updated outlook for Brazil is scheduled for March 12th. Soybean products were lower with meal leading the way down on fund liquidation. Both meal and oil picked up another round of pressure from the larger-than-last-year crop in Argentina, which is normally the world’s largest exporter of soybean products.

Corn was modestly lower on fund and technical selling. Corn was up early on an oversold bounce, but unable to follow through, hitting another round of contract lows. The trade continues to monitor U.S. conditions ahead of widespread planting with the USDA’s Prospective Planting numbers out at the end of March, along with the Quarterly Grain Stocks report. Corn is also watching development weather in Argentina, in addition to first crop harvest and second crop planting activity in Brazil. The Rosario Grain Exchange lowered its outlook for Argentina to 57 million tons, a cut of 2 million on the month. Demand for ethanol use is solid and while exports are still good, Ukraine is starting to take some of the market share. The U.S. Energy Information Administration says ethanol production last week averaged 1.084 million barrels a day, up 1,000 on the week and 55,000 on the year, with stocks of 25.502 million barrels, a decline of 308,000 from the week before and 86,000 from a year ago.

The wheat complex is mixed. Chicago was steady to firm, finding some interest near the recent lows, while Kansas City and Minneapolis were down on slow exports and large supplies. Russia, and to an extent, Ukraine remain in charge of world wheat business due to prices. The USDA’s weekly export sales numbers are out Friday morning, delayed a day by Presidents’ Day. Near-term winter wheat weather looks mixed, better in the east than the west. The USDA’s penultimate set of monthly state crop stories is out next week and weekly national crop progress and condition reports resume in April. The trade is keeping an eye on conditions in the northern U.S. Plains and Canada ahead of spring wheat planting, along with the dry weather in parts of Australia prior to winter wheat sowing in the Southern Hemisphere.

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