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Wheat gains ground as soybeans move lower

Soybeans were lower on fund and technical selling. Parts of Argentina and northern Brazil received better than expected weekend rainfall, with more potentially on the way. Some replanting has been done and there’s a long way to go, but improvements in soil moisture in those areas will help. The near-term supply is tight and demand is solid, but that was not enough to break the pressure from improved weather in parts of South America. CONAB’s updated outlook for Brazil is out Thursday, with new USDA supply, demand, and production numbers out Friday. Soybean meal and oil were down on signs of slowing demand, even as domestic margins remain bullish. The Philippines bought 183,000 tons of 2023/24 U.S. soybean meal Monday morning. U.S. soybean export inspections were down on the week and the year, mainly to China and Spain. The pace of shipments has slipped a little with Brazil still exporting soybeans aggressively. Statistics Canada says 2023 canola production was 18.328 million tons, down 2% from 2022 with higher planted area canceled out by lower yields. Canada’s soybean crop was 6.981 million tons, up 5.1% on the year.

Corn was mostly modestly lower. Corn is watching weather in South America, including another round of unneeded rain in southern Brazil against welcome rain in other areas. The big question for Brazil will be the performance of their second crop, which is planted after soybeans are harvested. Given the delays in planting beans, some second crop planting delays are expected and some soybean producers have switched to cotton, taking those potential corn acres off the board entirely, when planted area was already expected to be lower than last year. Export demand has improved with Mexico buying 267,044 tons of U.S. corn. U.S. export inspections were above a week ago and a year ago, in line with what’s needed to meet projections for the current marketing year. The leading destinations were Mexico and China. Most of what had been unshipped is being impacted by low levels on the Mississippi River and the increased costs of movement through the Panama Canal. Statistics Canada says 2023 corn for grain production was 15.076 million tons, 3.7% more than a year ago due to an increase in harvested area.

The wheat complex was higher on commercial and technical buying. Chicago took the lead with China buying 440,000 tons of U.S. 2023/24 soft red winter, which follows a higher move in Russia’s prices. China is still buying from other sources, including Australia and France, but U.S. SRW prices are highly competitive. Ukraine’s exports are slower than a year ago and weather is delaying movement out of the Black Sea, impacting both Ukraine and Russia. U.S. export inspections were under the previous week and last year, primarily to Japan and the Philippines. Right at the halfway point in 2023/24, the pace is behind 2022/23. Statistics Canada says 2023 wheat production totaled 31.954 million tons, 6.9% below 2022 due to lower yields, but that was still more than what analysts were anticipating ahead of the report. Spring wheat made up most of the total at 24.762 million tons, a decline of 4.2% on the year.

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