Market News

Soybeans, corn give back some gains, wheat falls

Soybeans were lower on profit taking and technical selling, along with a drop in crude oil. Beans and meal gave back part of Tuesday’s gains, focusing on record production in Brazil instead of weather in Argentina. There is some rain in the forecast for Argentina ahead of a return to hot, dry weather. The full extent of damage from this year’s drought and last weekend’s frost/freeze won’t be quantified for some time. Production in Brazil and the rest of South America is expected to more than make up for Argentina’s losses. The USDA’s next round of supply and demand estimates is out March 8th with CONAB’s updated outlook for Brazil scheduled for March 9th. Soybean meal was down on that profit taking, while bean oil was mixed on bull spreading, supporting nearby contracts over deferred months. The USDA will release its first look at 2023 U.S. planted area Thursday with the average estimate for soybeans at 88.6 million acres with a crop of 4.515 billion bushels, a yield of 51.5 bushels per acre and 2023/24 ending stocks of 319 million bushels.

Corn was lower on profit taking and technical selling, in addition to the losses in crude oil. Rain in Argentina might not make much of an overall difference but could help some of the later planted corn crop. Still, a significant portion of this year’s production potential has been lost. Second crop corn planting in Brazil is about 40% complete, with harvest getting underway this summer. While demand for U.S. corn should improve soon, exports are much slower than last marketing year, mostly because of lower interest from China. The window for corn should be wide open next month but expected to snap shut once Brazil’s second crop hits the market. Ahead of Thursday’s USDA Ag Outlook Forum, analysts see 2023 planted area at 90.9 million acres, with a crop of 14.949 billion bushels, an average yield of 179.74 bushels per acre, and 2023/24 ending stocks of 1.809 billion bushels. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday and the USDA’s weekly export sales numbers will be released Friday, both delayed a day by Monday’s holiday.

The wheat complex was lower on fund and technical selling, seeing additional pressure from the relative strength in the U.S. dollar. Near-term forecasts have good precipitation prospects in some of the drier parts of the U.S. Plains. That should benefit the hard red winter crop to some extent, but at least some yield potential has been lost in parts of the region because of this extended drought period. Soft red winter conditions are comparatively good and the trade is also monitoring weather in the northern U.S. Plains and Canada ahead of spring wheat planting. Ahead of the Ag Outlook Forum, analysts have 2023 wheat planted are at 48.7 million acres, with a combined crop of 1.893 billion bushels, an average yield of 48.6 bushels per acre, and 2023/24 ending stocks of 650 million bushels. Export demand is slow, with Russia and Ukraine holding most of the market. The Black Sea Grain Initiative is scheduled to expire in mid-March, with Ukraine pushing for a one-year extension ahead of talks that will include Turkey and the U.N.

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