Market News

Most active soybean contracts close above $15

Soybeans were higher on commercial and technical buying, with January through August closing above $15. The trade continues to monitor conditions in Argentina, with widespread parched soils despite some recent rain. That helped to support soybean meal as any significant losses for Argentina could help U.S. soybean product demand. Argentina is normally the world’s leading exporter of soybean products. Argentina’s Ag Ministry says 78.9% of the 2021/22 crop has been sold, a solid improvement on the week thanks to Buenos Aires’ “soy dollar” program, but slightly behind the 2020/21 pace. Brazil looks comparatively better, with rain in the forecast for many areas this week, including some, but not all, of the dry areas in the south. Either way, it looks like any losses in Argentina and southern Brazil could be offset by the rest of Brazil’s crop. Early harvest activity is reportedly underway in parts of Brazil, but activity won’t really gain steam for another month. Bean oil closed lower on profit taking and the losses in crude oil. Sustained soybean demand from China continues to be a big question mark because of rapidly rising COVID cases.

Corn was higher on commercial and technical buying. Corn is watching weather in South America, especially the dry conditions impacting Argentina, which have pulled crop ratings well below a year ago and probably cost corn some acreage. Argentina’s Ag Ministry says 74% of their 2021/22 corn crop has been sold, a little bit slower than this time last year. The big test for corn in Brazil will be the second crop, which is planted after soybeans are harvested. Domestic feed demand is solid, but exports continue to be slow and ethanol margins are negative in parts of the Midwest. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday, delayed a day by Monday’s closure. The numbers are expected to be down on the week, reflecting the impact of the frigid temperatures and blizzard condition in much of the Midwest last week.

The wheat complex was mostly higher, with Chicago and Kansas City up and Minneapolis mixed. Winterkill is likely in portions of the Plains following last week’s cold snap with limited snow cover and forecasts for southwestern growing areas are mostly dry, exacerbating drought conditions. While the full impact on hard red winter won’t be known until the crop emerges from dormancy, it’s an increasingly safe bet at least some of the production potential has been lost. Conditions are somewhat better for the soft red winter crop in the eastern Corn Belt. Russia continues to attack Ukraine and is reportedly delaying some grain shipments, limiting Ukrainian efforts to supply food to some of the world’s most vulnerable populations. Russia continues to hold the lion’s share of the export market following record production with help from the relative weakness in the ruble. Egypt bought 80,000 tons of wheat from Russia. SovEcon pegs Russia’s 2022/23 wheat crop at 101.2 million tons, 300,000 more than their last guess, citing weather. 2023/24 production is projected at 86 million tons. Argentina’s Ag Ministry says 48% of the 2022/23 wheat crop has been sold.