Market News

Corn manages firm finish

Soybeans were mixed. Beans consolidated, continuing to watch harvest delaying rain in parts of central and northern Brazil and generally dry weather in much of Argentina. Argentina is expected to see at least some improvement in precipitation, while still undergoing a net-drying effect, while southern Brazil should see some near-term rainfall. Demand continues to be strong, with the NOPA reporting a record monthly crush in January, which was also the second largest for any month. No new soybean export sales to China, or unknown destinations, have been announced in the last few days, likely because of the ongoing Lunar New Year holiday. The USDA’s Ag Outlook Forum, which starts Thursday, with give a preview of the department’s expectations for the 2021/22 marketing year. Ahead of the report, analysts see soybean planted area at 89.4 million acres, with an average yield of 50.9 bushels per acre, production of 4.506 billion bushels, and ending stocks of 184 million bushels. The USDA’s prospective planting and quarterly stocks numbers are out March 31st. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn ended the session modestly higher on short covering and technical buying. Strong demand helped contracts rally after early losses and the issues in South America should lead to continued global reliance on U.S. corn. The soybean harvest delays in parts Brazil are pushing back the planting of their critical second corn crop, while dry weather in other areas of Brazil and much of Argentina is expected to limit yield potential. The limited sales by Russia and Ukraine are also positives for corn. The USDA’s weekly export sales numbers are out Friday, while the U.S. Energy Information Administration’s weekly ethanol numbers are out Thursday, both delayed by Presidents’ Day. The USDA’s Ag Outlook Forum later this week is expected to project 2021 U.S. corn planted area at 92.9 million acres, with an average yield of 178.4 bushels per acre, production of 15.16 billion bushels, and 2021/22 ending stocks of 1.665 billion bushels. DTN says a South Korean feed mill bought 69,000 tons of optional origin corn, expected to be sourced from the U.S. Ethanol futures were unchanged.

The wheat complex was lower on profit taking and technical selling. Temperatures in the U.S. should moderate soon and the precipitation will help winter wheat development after the crop emerges from dormancy. Any potential winterkill from the last few days won’t fully be known until spring. The trade is also monitoring the overwintering weather in the Black Sea region and European Union, conditions ahead of spring wheat planting in the U.S. and Canada, and harvest activity in Australia. Confusion continues over some of the specifics of Russia’s new export tax regime, with consulting firm IKAR raising its projection of production to 78 million tons. The USDA’s next set of official supply, demand, and production estimates is out March 9th. Ahead of the USDA’s Ag Outlook Forum later this week, analysts anticipate the USDA putting all wheat planted area at 45.5 million acres, with an average yield of 49.4 bushels per acre, production of 1.879 billion bushels, and new crop ending stocks of 739 million bushels. DTN says Algeria bought 30,000 to 60,000 tons of milling wheat from an unknown origin, while Japan is in the market for 82,393 tons of U.S. milling wheat and the Philippines is tendering for 75,000 tons of feed wheat and 70,000 tons of food wheat.

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