Market News

Minneapolis leads wheat complex higher

Soybeans were lower on commercial and technical selling. The trade is watching harvest activity in Argentina and Brazil, along with conditions ahead of widespread U.S. planting. The USDA’s attaché in Brazil estimates 2020/21 production at 134 million tons, with exports of 85 million tons, rising to 141 million and 87 million tons, respectively, in 2021/22. Export demand has slowed down, but the supply remains tight, with the next set of supply, demand, and production numbers out Friday. Domestic demand is also being impacted by tight U.S. supplies and high prices, with some unconfirmed reports of imports from Brazil. Brazil’s grain trade group ANEC sees April exports at 16.3 million tons, compared to 14.2 million tons a year ago. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was higher on commercial and technical buying. Corn is also watching conditions in South America and the early planting pace in the U.S., with near-term delays probable in parts of the Midwest. Still, any bullishness attached to those delays is muted by the soil moisture improvements in parts of the region. The USDA’s attaché for Brazil has corn production at 105 million tons, 4 million less than the USDA’s most recent official guess because of lower yields in the second crop caused by planting delays. Exports this marketing year are seen at 37 million tons, compared to the current official estimate of 39 million tons. 2021/22 production is expected to rise to 114 million tons with exports of 40 million tons. Brazil’s grain trade group ANEC estimates April 2021 corn exports at 22,000 tons, compared to 0 in April 2020. APK-Inform says Ukraine’s corn exports for the first half of the current marketing year was 15.9 million tons, down 25% from the same stretch of 2019/20, with China the leading buyer, followed by the European Union and Egypt. Ethanol futures were firm. Ethanol production was up 10,000 barrels on the week and 303,000 on the year at an average of 975,000 barrels a day, while stocks tightened to the lowest levels since mid-November 2020, falling 472,000 barrels on the week and 6.449 million on the year to 20.642 million. The Renewable Fuels Association says February ethanol exports were 101.7 million gallons, down 38% from January, with DDGS exports of 779,324 tons, a decline of 15% on the month.

The wheat complex was higher on commercial and technical buying. Minneapolis was in the lead on the drier than normal weather in the northern U.S. Plains and Canada, which could pull spring wheat planted area lower. The USDA last week showed an already lower than expected 2021 planted area estimate. Chicago and Kansas City were up, following Minneapolis, monitoring winter wheat development conditions and feed wheat demand. Kansas City is now about evenly priced with corn, which is expected to bump up its use in some rations. DTN says Egypt bought 345,000 tons of wheat from Russia and 55,000 tons from Ukraine, while Thailand is in the market for 504,000 tons of feed wheat and Japan is tendering for 90,815 tons of food wheat from the U.S. and/or Canada. The USDA’s attaché for Brazil pegs 2020/21 wheat production at 6.25 million tons, with imports of 6.5 million, with 2021/22 projected at 7.05 million tons and 6.7 million tons, respectively. Most of Brazil’s wheat imports come from Argentina.