Corn finishes Friday firm with soybeans, wheat weak
Soybeans were modestly lower on profit taking and technical selling, along with declines in soybean and crude oils, while still closing solidly higher on the week. Most medium-term forecasts had more dry weather in Argentina, while rain has delayed harvest activity in parts of Brazil. There have been no reports of quality issues associated with those delays. Conversely, estimates for Argentina have fallen sharply, which could open the door for at least some improvement in U.S. soybean meal and oil exports. Bean meal was higher Friday on those demand expectations, with March briefly trading above $500. Bean oil was pressured by the drop in crude oil. Domestic demand remains strong and crush margins are bullish. Unknown destinations bought 132,0000 tons of U.S. beans for delivery next marketing year, which starts September 1st. There’s been talk, but no confirmation, of China buying several cargoes of soybeans from Brazil.
Corn was modestly higher on fund and technical buying, but ended the week mixed, with nearby months lower and deferred contracts higher. Corn is watching development weather in Argentina and the early second crop planting pace in Brazil. That pace is behind schedule because of the slow soybean harvest. CONAB’s next set of projections for Brazil is out February 9th. The trade is also waiting to see the full impact on Brazil reintroducing ethanol import tariffs. Export demand is slow, but the window should be opening wider in the coming weeks. While last week’s sales were solid, the pace of shipments remains slower than what’s needed to meet projections for the current marketing year. Brazil is nearly out of old crop, but a trade agreement with China is expected to facilitate increased business. Sustained demand for U.S. corn from Mexico is a concern because of an impending ban on GMO imports. The USDA’s attaché in Mexico estimates 2022/23 domestic production at 27.4 million tons, above 2021/22, with imports of 17.3 million tons, down from the record large purchases last marketing year.
The wheat complex was modestly lower on fund and technical selling, with the most active months finishing the week unchanged to modestly higher. There was precipitation in the forecast for parts of the southern Plains, but large portions of the region remain much drier than normal. That should have at least some impact on hard red winter yields and could lead to higher rates of abandonment. Soft red winter conditions continue to generally look better than hard red winter. U.S. prices remain non-competitive on the global market with Russia holding most of export share and a lesser amount to Ukraine. The USDA’s attaché in Mexico projects 2022/23 domestic wheat production at 3.57 million tons, compared to 3.285 million in 2021/22, with imports of 5 million tons, slightly less than last marketing year, but steady with the post’s previous guess.