Market News

Corn up with fresh export demand

Soybeans were modestly lower on fund and technical selling. Still no indication of increased demand from China ahead of the Lunar New Year celebrations starting this week. All indications are, China has near term needs generally covered, with South American supplies expected to start increasing over the next several weeks and the uncertainty about the full impact of the current coronavirus outbreak is also contributing to the demand questions. The trade is watching harvest activity in Brazil and crop conditions in Argentina. Drier weather is expected to help harvest activity speed up in Brazil, and yields have been better than a year ago in some areas, while Argentina could see improved rainfall next week. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was higher on short covering and technical buying. Guatemala and unknown destinations both bought U.S. corn Thursday morning, but overall, the pace of sales remains behind last marketing year. Guatemala purchased 143,948 tons, 114,224 for 2019/20 and 29,724 tons for 2020/21, while unknown destinations picked up 141,000 tons, all for 2019/20. The USDA’s weekly export numbers will be out Friday morning, delayed by Monday’s holiday. U.S. exports in general have been limited by increase competition from South America and Ukraine. Parts of Brazil are seeing planting delays for the second corn crop, the source of most of their exports, and parts of Argentina are dry. Ukraine remains a big player in the export game with some Asian feed manufacturers turning to that nation because of quality issues with the most recent U.S. crop. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 1.049 million barrels a day, down 46,000 from the previous week, while stocks were up 1.025 million barrels at 24.031 million.

The wheat complex was mixed. The complex continues to monitor international prices and crop conditions, along with the effects of precipitation in the U.S. That precipitation is welcome for hard red winter, taking Kansas City steady to weak for the session, but some soft red winter areas are too wet, supporting Chicago. Minneapolis was weak, watching weather in the northern U.S. Plains ahead of spring wheat planting. The recent price strength in Europe and Russia provided a lot of support for U.S. futures, but caused contracts to be overbought and limited U.S. export competition. Still, the overall pace of sales for 2019/20 remains just ahead of 2018/19, even with that recent gain in price. Additionally, global stocks have gotten tighter. The USDA’s next set of supply and demand estimates is out February 11^th. DTN says Japan bought 108,296 tons of food wheat from the U.S. and Canada.