Market News

Soybeans fall on crop weather, demand questions

Soybeans were lower on fund and technical selling. Near-term forecasts have more rain in parts of Argentina and better harvest weather in central Brazil. Some damage has likely been done in Argentina and while Brazil’s harvest is catching up to the average, it could push some second crop corn planting past the ideal window. CONAB’s updated outlook for Brazil’s crops is out Thursday, while the USDA’s next set of supply, demand, and production numbers is out March 11^th. ANEC estimates February soybean exports by Brazil at 10.1 million tons, compared to 9.77 million last week, with soybean meal exports of 1.93 million tons, compared to the previous guess of 1.52 million. Unknown destinations did buy 120,000 tons of 2024/25 U.S. beans ahead of the open, but overall export demand has slowed down with U.S. beans at a premium to competing origins. It remains to be seen if “unknown destinations” will turn out to be China or some other destination. Soybean meal and oil were lower on demand questions. Tariffs are an ongoing background question.

Corn was higher on short covering and technical buying. Corn’s monitoring weather in South America while having at a generally good demand outlook. That soybean harvest pace in Brazil is critical for second crop corn planting and longer-term outlooks for parts of Argentina and southern Brazil are generally warm and dry. Ethanol production was down on the week, but larger than average. The U.S. Energy Information Administration says ethanol production averaged 1.082 million barrels per day, down 30,000 on the week and 1,000 on the year, while stocks dipped to a four-week low of 25.692 million barrels, 720,000 less than the week before and 118,000 under a year ago, but exports averaged 150,000 barrels per day, an increase of 44,000 from the prior week and 43,000 from this time last year. Ahead of the open, unknown destinations purchased 130,320 tons of 2024/25 U.S. corn. ANEC sees Brazil’s February corn exports at 10.1 million tons, compared to the previous projection of 9.77 million.

The wheat complex was lower on fund and technical selling. Wheat’s keeping an eye on a winter storm and colder temperatures in parts of the Plains and Midwest. Bitterly cold conditions are expected in many areas by this weekend, but parts of the region will have insulating snow, mitigating some of the potential concerns about winterkill. The trade’s also watching development conditions in Europe, Russia, and Ukraine. Russia’s grain export cap officially goes into effect Saturday. It remains to be seen how much business the U.S. will be able to pick up and how much will go to Argentina, Australia, or some other exporter. The potential end to the war between Russia and Ukraine is also a wildcard, mostly for new crop planting and marketing. The USDA’s weekly U.S. sales numbers are out Thursday morning.