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Down day to start week for soybeans, corn, wheat
Soybeans were lower on fund and technical selling, in addition to the higher dollar and lower crude oil. Brazil’s soybean prices have dropped as harvest advances, now 11% complete as of last Thursday according to AgRural, for an even bigger edge on the export market. U.S. export inspections were down from last week and a big drop from last year, with the 2023/24 pace remaining slower than 2022/23. The biggest destinations were China and Mexico. There are concerns in Argentina about a hot, dry pattern ahead of more rain next week. Still, overall, conditions remain much better than a year ago, with production projections predicting a significantly larger crop. Soybean meal was higher and bean oil was lower, adjusting product spreads.
Corn was lower on fund and technical selling, along with some outside market influence. Corn is watching South America and the early planting pace for Brazil’s critical second crop, which AgRural pegs at 11% complete in central/southern growing areas. CONAB’s updated outlook for Brazil and the USDA’s next round of supply, demand, and production numbers are both out February 8th. This hot, dry weather in Argentina comes during the pollination phase, which could trim yield. That comes the week after a record production guess for Argentina from the Buenos Aires Grain Exchange. U.S. export inspections were up on the week and the year, with shipments for the current marketing year staying ahead of what’s needed to meet estimates for 2023/24. The top destinations were Mexico and Japan.
The wheat complex was lower on fund and technical selling, also picking up pressure from gains in the dollar during the session. The big bearish factor remains slow export demand, due to Russia and the relative strength in the dollar, with the trade ignoring lower U.S. planted area, as the USDA estimates a 6% year-to-year decline for winter wheat acreage. The trade also seems to be shrugging off possible lower production in Europe and drought in north Africa. Global stocks were already tightening and this could just exacerbate that issue even further. Getting closer to the final quarter of the 2023/24 marketing year, it was another bearish week for wheat export inspections, falling below the prior week and a year ago. The main destinations were Mexico and the Philippines. Egypt’s supply minister says that nation expects to import approximately 7 million tons of wheat in 2024.
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