Market News

Soybeans up Friday, but still down on week

Soybeans were higher on short covering and technical buying, just not enough to escape weekly losses. Beans were oversold and due for a bounce after hitting multi-month lows. Domestic crush demand is strong, canceling out some of the bearishness of slow export sales. That January NOPA member crush was smaller than expected, but still record large for the month. Soybean meal was higher and bean oil was lower, adjusting product spreads. Bean oil picked up additional pressure from higher-than-expected NOPA stocks. Soybeans continue to monitor development weather in Argentina and harvest activity in Brazil, with the USDA’s new supply, demand, and production numbers out March 8^th and CONAB’s updated outlook for Brazil on March 12^th. Lunar New Year celebrations in China will wrap up soon, with many expecting an improvement in demand.

Corn was mostly firm, while ending the week fully lower. It was an up and down day, with the big feature traders moving out of nearby contracts and into deferred months. The USDA’s Ag Outlook Forum numbers were bearish, as expected, and South American weather is mostly favorable. Recent rain has helped stabilize conditions in parts of Argentina and while precipitation has aided beans in Brazil, it hasn’t been quite enough to really cement successful second crop corn, but that could change over the next few weeks. Brazil’s second crop has been a question mark all season because of the soybean planting delays caused by weather, which also led to some replanting and crop switching. Safras e Mercado cut their outlook for Brazil’s three combined crops to 125.862 million tons on a 6.2% decline in planted area. Stateside, the trade’s watching conditions ahead of planting with Prospective Planting projections, and Quarterly Grain Stocks, both out at the end of March.

The wheat complex was lower on fund and technical selling, compounding what would have already been a bearish weekly finish. Wheat saw another round of pressure from slow exports and large world supplies. The U.S. dollar weakened late in Friday’s session, but remained high relative to competing currencies, with additional pressure from lower prices in France and the Black Sea region. Egypt bought 180,000 tons of wheat, 120,000 from Ukraine and 60,000 from Romania. Wheat is oversold, but those fundamentals will be hard to overcome. In the U.S., winter wheat will likely emerge from dormancy in much better condition than last year thanks to improved precipitation, even with talk of higher than anticipated rates of abandonment in parts of the Plains. The trade also has an eye on weather in the northern Plains and Canada ahead of spring wheat planting. Strategie Grains sees 2024/25 soft wheat production in the European Union at 122.6 million tons, slightly lower than January’s guess. IKAR raised its outlook for Russia’s wheat crop to 93 million tons, expecting exports to top 52 million tons.