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Quiet end to a strong week for soybeans and corn

Soybeans were mixed on spread trade and profit taking, still finishing the week with strong gains sparked by Tuesday’s USDA numbers. Most forecasts have good near-term rainfall in parts of Argentina and Brazil, but more will be needed. While harvest is just getting underway in parts of Brazil, widespread activity is still a few weeks away. The Buenos Aires Grain Exchange says 19% of Argentina’s bean crop is in poor to very poor condition. The International Grains Council lowered its 2020/21 world soybean production guess 6 million tons to 359 million. Unknown destinations bought 318,000 tons of 2021/22 U.S. beans. That could turn out to be China when it is time for delivery. The NOPA says member firms crushed 183.159 million bushels of soybeans during December, a little bit less than expected, but up on the month and year. Soybean meal was mixed, following beans, and bean oil was down sharply with pressure from crude and palm oils.

Corn was mixed on spread trade and profit taking, also finishing the week with strong, USDA inspired gains. Corn is also watching weather in South America, while consolidating after the most recent round of highs. The early planting delays in South America have pushed back development and harvest, with the dry weather having a big impact on Argentina’s potential, and will also push back the planting of Brazil’s critical second crop. The Buenos Aires Grain Exchange cut its outlook for Argentina to 46 million tons, compared to 51 million a year ago, with 19% of the crop rated good to excellent, compared to 55% this time last year. 16% of the crop is called poor to very poor. The International Grains Council sees global 2020/21 corn production at 1.133 billion tons, compared to the previous projection of 1.146 billion. Chinese corn was higher heading into the U.S. session. Mexico bought 110,000 tons of 2020/21 U.S. corn. Mexico’s ban on GMO corn will reportedly include livestock feed. Ukraine’s Economic Ministry says corn exports since the start of the marketing year July 1st are 10.3 million tons, with total grain exports 18% behind the 2019/20 pace. Ethanol futures were steady to lower.

The wheat complex was higher on short covering and technical buying, cementing sharply higher week to week finishes at the three U.S. exchanges. Russia reportedly will impose an export tax February 15th, which would double on March 1st, and could extend that duty into the next marketing year, but Ukraine isn’t signaling any policy change. Kyiv did agree last year to cap wheat exports at 17.5 million tons, with the marketing year to date total at 12.7 million tons. Still, those factors will likely send at least some export business to the U.S. The International Grains Council pegs 2020/21 world wheat production at 768 million tons, a million less than the prior estimate. Most forecasts do have precipitation in the U.S. Plains, but not enough to reverse drought conditions. DTN says Jordan is tendering for 120,000 tons of milling wheat and Japan bought 116,700 tons of wheat from the U.S., Australia, and Canada. The trade is also monitoring harvest activity in Australia.

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