Market News

Dollar sends soybeans, corn lower

Soybeans were lower on fund and technical selling, in addition to the higher trade in the U.S. dollar index. The trade is waiting for any news out of this week’s negotiations with China. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in Beijing this week, with the deadline for talks approaching rapidly. Beans are also watching the spread of African Swine Fever in China, which could lower that nation’s demand for beans and meal. Weekly export inspections continue to trail USDA expectations, but China was the top destination again this week. Weather conditions in South America mostly look non-threatening to favorable. AgRural lowered its outlook for Brazil’s bean crop to 112.5 million tons, because of weather issues earlier in the growing season, adding 26% of the crop is harvested. CONAB’s new estimate is out Tuesday. Soybean meal and oil followed beans lower. Ecuador bought 120,000 tons of U.S. bean meal, half for this marketing year, half for next marketing year.

Corn was modestly lower on fund and technical selling, along with the higher dollar. Corn is also watching conditions in South America, especially the planting pace of Brazil’s second crop, in addition to those trade negotiations. Commodities in general are wary about another shutdown as funding for the federal government runs out Friday. Ethanol futures were higher. The industry is watching margins, while waiting to see what happens with year-round E15 implementation and if there are any policy changes at the EPA. Weekly export inspections for corn have slowed down, but 2018/19 remains ahead of 2017/18, almost halfway through the marketing year.

The wheat complex was mixed, with Chicago up, Kansas City down, and Minneapolis mostly steady to weak. Nigeria bought 128,000 tons of 2018/19 U.S. hard red winter, Egypt purchased 120,000 tons of U.S. soft red winter, and the UDSA reported last week winter wheat acreage is the lowest since 1909, including new record lows in Nebraska and Ohio. Still, the domestic and international supply and demand outlooks remain neutral to bearish. The next set of supply and estimates is scheduled for March 8th, but that would probably be pushed back by another shutdown. In addition to the U.S. SRW, Egypt also picked up 120,000 tons of milling wheat from France and 60,000 tons of milling wheat from Ukraine. Weekly export inspections were up on the week and the year, but with a quarter remaining in 2018/19, remain behind last marketing year’s pace. Russia has priced itself out of the export market, for now, with Allendale reporting the Ag Minister met with exporters Monday to discuss strategy for the remaining marketing year. AgriCensus says new trade body will coordinate export efforts between public and private entities.