Market News

Soybeans, corn continue downward drift

Soybeans were lower on fund and technical selling. China did buy 1.8 million tons of U.S. beans last week, but the trade wants to see more fresh business after the recent pledge to buy 10 million tons. More talks between the world’s two largest economies are expected in March. Weather in South America looks non-threatening to favorable and prices in Argentina and Brazil are below the U.S., likely staying that way into late spring or early summer, further limiting export competitiveness. The trade is also waiting to see if there will be acreage adjustments because of expected corn and spring wheat planting delays. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The USDA’s January soybean crush report is out Friday, with analysts expecting a total around 182.7 million bushels. The report is scheduled for 3 Eastern/2 Central.

Corn was modestly lower on fund and technical selling. Weekly corn sales were good, no China again this week, but Mexico and South Korea did both buy U.S. corn Thursday morning. Mexico bought 168,000 tons and South Korea picked up 133,000 tons, both for delivery during the current marketing year. DTN says South Korea purchased 128,000 tons of optional origin corn, probably from South America because of cheaper prices for Argentine supplies. Corn is also watching weather in South America, along with pre-planting conditions in the Midwest, expecting delays in some key growing areas. The USDA’s prospective planting report is out at the end of March. Ethanol futures were lower. The industry is waiting to see what policy changes, if any, occur at the EPA, including the agency’s stance on refinery waivers, and when year-round E15 use availability is implemented.

The wheat complex was mostly modestly lower. Minneapolis was up on the comparatively good demand outlook and probability of spring planting delays in parts of the northern Plains. Chicago was down and Kansas City was mostly lower on slow export demand, with another set of bearish weekly numbers, even with a chance of winterkill in the Plains. The entire complex is oversold, but it’s hard for wheat to get any traction because of the fundamentals. Aside from more hot, dry weather in the forecast for Argentina, global crop conditions generally look good, with most outlets anticipating another large world crop. The USDA’s next set of supply and demand estimates is out March 8th. DTN says Thailand bought 110,000 tons of feed wheat, “likely” Black Sea origin. Saudi Arabia is tendering for 595,000 tons of optional origin milling wheat and Jordan is in the market for 120,000 tons of milling wheat. The USDA’s attaché in Canada has Canada’s 2018/19 wheat exports at 24.2 million tons, 200,000 more than the most recent official projection because of record demand from China. Production is pegged at 31.769 million tons, a little bit less than the current official guess.