Big gains for soybeans after USDA numbers
Soybeans were sharply higher on commercial and technical buying, cementing strong weekly gains. Planted area came out at 87.5 million acres, up slightly on the year, and quarterly stocks were smaller than expected. The stocks total did reflect strong domestic demand, canceling out some of the impact from slower exports. The USDA’s next round of supply and demand estimates is out April 11th. There was probably also some effort by beans to buy acres from corn is early planting delays materialize as expected in some areas. Soybean meal and oil were higher, following beans. Argentina’s government is planning a third round of their soy dollar program designed boost sales in the face of some farmers holding back supplies because of drought impact on production. The sales scheme is scheduled to start in April.
Corn was mixed, with the most active months ending the week in positive territory. Planted area is seen at nearly 92 million acres, about a million above the Ag Outlook Forum and 4% larger than a year ago. However, that number is probably going to change, with a big chance for early planting delays in parts of the Corn Belt, Delta, and Plains. Quarterly stocks were slightly below pre-report expectations, 5% lower than last year, with lower implied quarterly usage, partially because of a smaller crop in 2022 than 2021. The trade is monitoring second crop planting in Brazil, along with dwindling prospects in much of Argentina. CONAB’s new estimates for Brazil are scheduled for April 13th. There were no reported export sales Friday morning, potentially signaling an end to the recent purchasing streak by China.
The wheat complex was mixed, with Chicago nearly unchanged and Kansas City and Minneapolis up, while nearby contracts at all three were higher on the week. All wheat acreage is just short of 50 million, with a big increase in winter wheat against a decrease for spring wheat. If realized as projected, it would be the lowest spring wheat acreage since 1972, but that’s not factoring in likely planting delays in parts of the northern U.S. Plains. For winter wheat, normally a big increase in acreage would portend a larger crop, but that’s unlikely due to drought impact on yield and rates of abandonment. The USDA’s weekly crop progress and condition reports resume Monday, April 3rd. Spring wheat planting delays are also probable in parts of the Canadian Prairies. Quarterly stocks were a little larger than expected, but still down 8% on the year. The year-to-year decrease can be tied to strong domestic demand, as exports continue to be slow, with Russia, Ukraine, the European Union, and Australia holding most of the market share.