Corn up on weather concerns, improved exports
Soybeans were lower on profit taking and technical selling, along with spillover from bean meal, but still closed higher on the week. Beans continue to watch South America, with a general return to hot, dry weather expected early next month. Recent rainfall has favored Argentina over southern Brazil. CONAB’s next set of projections for Brazil is out February 10th. China bought 132,000 tons of 2021/22 U.S. beans, answering some recent rumors. Soybean export sales for the week ending January 13th were down on the week, but up from the four-week average, with solid old crop sales to China and Mexico against a cancellation by unknown destinations. Unknown, along with China, did buy new crop U.S. beans last week. Soybean meal was pressured by profit taking, while bean oil was mostly higher, adjusting spreads, with some support from the new highs in palm oil. Reports out of Canada have a surge in canola crushing to meet demand expectations, despite very tight domestic supplies.
Corn was modestly higher on commercial and technical buying, also ending the week higher. Corn is monitoring weather in Argentina and southern Brazil, expecting further reductions in yield potential. The trade is waiting to see the conditions for Brazil’s second corn crop, the largest of the three and the source of most of their exports, which is planted after soybeans are harvested. Stateside, Informa Economics is expected U.S. corn acreage to fall below soybeans for the first time ever this year, driven down by higher input costs and global vegetable oil demand. Friday morning, Unknown destinations bought 247,800 tons of 2021/22 U.S. corn. The big question is whether that’s going to be delivered to Mexico or China. Weekly export numbers were solid, pulled back over a million tons by solid demand from Japan and Mexico. Russia’s export tax on corn will go over $50 per ton in the coming week, possibly driving more business to the U.S. Ethanol futures were unchanged.
The wheat complex was lower on fund and technical selling, while still posting a higher weekly finish. The trade is keeping an eye on the tensions between Russia and Ukraine, two of the largest wheat exporters. Those tensions have also played a role in the energy markets and corn. Even if armed conflict doesn’t break out, shipping out of the Black Sea could still be disrupted. Russia’s wheat export tax will be modestly lower next week, with a cap on sales set to go into effect on February 15th, running through the end of Moscow’s current marketing year. Kansas City was up for most of the session on concerns about weather in the Plains but sold off late. Parts of the southern Plains have recently received precipitation, but drought conditions are expected persist around much of the region into spring, impacting not just winter wheat, but also spring wheat planting. Weekly wheat export sales were up solidly from both the prior week and the four-week average, with Nigeria topping the list. DTN says South Korean flour mills purchased 82,000 tons of mixed U.S. wheat, Japan bought 72,351 tons of milling wheat from the U.S. and Canada, and Taiwan picked up 49,395 tons of U.S. milling wheat.