Market News

Sell-off resumes for soybeans, corn

Soybeans were lower on fund and technical selling, giving back Tuesday’s gains and then some. Near-term development and harvest weather in South America looks non-threatening to beneficial. Parts of southern Brazil remain dry, but again, on the balance, many key growing areas have seen or will see rain this week. Domestic crush demand is solid, while exports are slow, with Brazil controlling the market. There’s been talk, but no confirmation, of China buying a significant amount of soybeans from Brazil following the ends of Lunar New Year celebrations and Carnival. ANEC projects soybean exports during February 2024 by Brazil at 7.3 million tons, compared to 7.55 million in February 2023. Traders are also watching conditions in the U.S. ahead of planting and any signals for a shift in the acreage mix. The USDA’s Prospective Planting report is out at the end of March, along with quarterly grain stocks. Soybean meal and oil were lower on the improved weather in Argentina, which is normally the world’s largest exporter of soybean products.

Corn was lower on fund and technical selling, with March establishing another new contract low. Corn is watching weather in Argentina and Brazil, which generally looks favorable. Stateside, the trade is monitoring conditions ahead of widespread U.S. planting. Ethanol and export demand are bullish, but the supply side of the market is bearish, with the next supply and demand update March 8th. Ahead of that, the U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday and the USDA’s weekly export sales numbers are out Friday, both delayed by President’s Day, with the normal schedule resuming next week. ANEC sees February 2024 corn exports by Brazil at 716,718 tons, compared to 1.94 million in February 2023.

The wheat complex was mostly lower, pressured by profit taking and technical selling. The big bearish factors for wheat continue to be the slow export demand and large global supply. Russia, and to an extent Ukraine, remain in control of the export market due to a price advantage. The U.S. dollar index has had a mostly lower trend over the past few sessions but remains high relative to competing exporters, limiting U.S. competition. The Food Corporation of India says January 1st wheat stocks were a seven-year low, which could lead to imports. March Chicago did manage to finish with a fractional gain, the only contract in the complex to close in the black. U.S. winter wheat is mostly in much better shape than this time last year, with the USDA’s weekly national crop progress and condition numbers resuming in April. There has been some recent rain in Australia, but more will be needed in most areas ahead of winter wheat planting. The trade is also monitoring conditions in the northern U.S. Plains and Canada prior to spring wheat sowing.

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