Market News

Soybeans continue freefall

Soybeans were sharply lower on fund and technical selling. Soybeans and products were down on another round of liquidation, along with spillover from a big drop in world vegetable oils. That’s despite expectations for tighter supplies in the second half of the year and projections for increased demand for biofuels usage. Brazil’s basis is falling as the record harvest advances due to a lack of storage space, pressuring global prices and putting more of Brazil’s beans on the market. Brazil’s ABIOVE sees production at 153.6 million tons, up 1 million from the last guess, with exports of 92.3 million tons, 300,000 more than their earlier guess, both record large. Weekly U.S. soybean sales were barely over 150,000 tons, mainly to China and Mexico, sharply lower than the previous week. Soybean meal was down sharply on the week, while soybean oil hit a marketing year high. The Rosario Grain Exchange sees Argentina’s soybean imports up 39% on the year because of the ongoing drought impacting production. There are reports of several Argentine crush plants remaining idle due to a lack of available beans. Argentina is usually the world’s largest exporter of soybean products.

Corn was mixed on bear spreading, with nearby contracts unable to follow through on periodic gains. China bought another 123,000 tons of U.S. corn, the seventh business day with an announced sale out of the last eight, pushing the running total for this streak over 2.5 million tons, all for delivery this marketing year. Last week’s export sales were a marketing year high at more than 3 million tons, including 2.245 million tons to China, more than offsetting a quarter million ton cancellation by unknown destinations. Mexico took second place. The overall pace remains behind last marketing year, partially due to China looking elsewhere for corn during the first half of 2022/23. China’s domestic prices are currently well above U.S. prices, even after shipping costs are factored in, and most other exporters are short of supplies. Fieldwork and early planting delays are ongoing in parts of the Midwest, but it is still early in the season. The USDA’s prospective planting report is out March 31st, along with quarterly grain stocks. Corn is also monitoring the second crop planting pace in Brazil and development conditions in Argentina.

The wheat complex was mostly higher. There was a chance for severe weather in parts of the Plains, potentially further damaging the hard red winter crop. It’s been a trying growing season for HRW with drought in the central and southern Plains expected to have a big impact on yields and abandonment rates. Soft red winter conditions remain comparatively good. The trade is also keeping an eye on potential spring wheat planting delays in parts of the northern U.S. Plains and Canada. Export sales were sharply lower than last week at just over 125,000 tons with sales to Mexico and China partially canceled out by a significant cancellation from unknown destinations. Russia, Ukraine, Australia, and the European Union continue to command a big chunk of the export market. Turkey is reportedly set to buy 700,000 tons of wheat, with Russia expected to supply most of the total. The USDA says it will add separate class-by-class lines for imports, food use, seed use, and feed and residual use in the next set of supply and demand estimates April 11th.

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