Market News

Another round of losses in soybeans, corn, wheat

Soybeans were sharply lower on fund and technical selling. Traders liquidated positions at the end of the month with under the influence of slower demand due to Brazil’s record crop. That record crop in Brazil should cancel out drought losses in Argentina. The USDA’s updated supply and demand outlook is out March 8th, while CONAB’s new outlook for Brazil’s crops is set for March 9th. Soybean meal and oil were lower on liquidation and a lack of new export demand even as crops wither in Argentina, which is normally the world’s biggest exporter of soybean products. That said – domestic margins and demand remain bullish.

Corn was lower on fund and technical selling. Corn liquidated on the first notice day for March contracts, watching second crop planting in Brazil, expecting a big crop, even if some of it is planted a little later than would be ideal. Similar to soybeans, a big enough crop in Brazil would cancel out the losses due, largely, to drought in Argentina. Midwest conditions generally look good ahead of widespread spring planting. The USDA’s prospective planting and quarterly grain stocks numbers are set for March 31st. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was lower on fund and technical selling, along with the late day rally in the U.S. dollar. Wheat is technically oversold and domestic demand is good, but slow export sales and strength in the dollar relative to other currencies are big bearish factors. Russia continues to control most of the export market due to their price advantage, with Ukraine and Australia also accounting for significant portions of global trade. The big question for wheat is whether or not the Black Sea Grain Initiative will be extended, with the current version of the agreement expiring in mid-March. Turkey, one of the key negotiators in the pact, reportedly bought 790,000 tons of wheat, mostly from Russia, with the remainder from Ukraine. There’s more precipitation in the forecast for parts of the Plains, but crop conditions in the region are generally bad news for hard red winter yields and probable abandonment. Soft red winter is in comparatively good shape and the trade is also monitoring conditions in the northern U.S. Plains and Canada ahead of spring wheat planting.

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