Soybeans, corn continue to follow broader market
Soybeans were sharply lower on fund and technical selling, ending the day near the session’s lows. Most ag commodities and the broader market in general continued to react to concerns about coronavirus and global economic health. That drop in the broader market was despite the Federal Reserve slashing interest rates and introducing an aggressive bond buying program. Beans are also waiting to see the phase one agreement improvement in demand from China. Export inspections were bearish with the USDA reporting no U.S. soybeans left U.S. ports last week for China. That was despite continued shipping delays out of Brazil, leaving Chinese supplies very short. That did help support beans overnight, but contracts were unable to get any traction during the usual session. The National Oilseed Processors Association says member firms crushed 166.288 million bushels of soybeans during February, a little more than expected, but down on the month. Soybean meal and oil were lower on the general bearishness in commodities and equities. NOPA member soybean oil stocks were below most analysts’ estimates.
Corn was lower on fund and technical selling, closing just above the session lows. Export demand remains slow and even with the recent drop in price, other origins remain at a big discount to U.S. prices. That includes a big discount in Argentina, which is a major export competitor, along with Brazil, South Africa, and Ukraine. Weekend rainfall was scattered in Argentina and Brazil, with better coverage expected this week in many areas. Weekly export inspections were up on the week and the year, but remain far behind last marketing year, just over the halfway point in 2019/20. The USDA’s prospective planting and quarterly stocks numbers are out on the 31st. Most analysts expect a big increase in U.S. planted area this year, but that will depend on the weather. Ethanol futures were lower on the prospects for lower blending demand. Sorghum inspections were above what’s needed weekly to meet USDA expectations, mostly headed to China.
The wheat complex was mixed with Chicago and Kansas City down and Minneapolis up. Wheat is also seeing plenty of export competition despite the drop in U.S. prices. Weekly export inspections were less than what’s needed to meet USDA projections for the marketing year, with less than a quarter remaining in the current marketing year. Minneapolis was supported by possible spring wheat planting delays in the northern U.S. Plains, with colder temperatures and probable snow this week. Coceral lowered its’ 2020 soft wheat production estimate for the European Union and the United Kingdom to 136.5 million tons, compared to 145.7 million in 2019 on lower planted area. Germany’s farm coop group expects a 1.2% year to year decline in wheat production, down to 22.79 million tons, on a 6.1% decrease in planted area. SovEcon says Russian wheat exports shot higher last week after a drop in the ruble against the dollar, rising 30% to 725,000 tons, leading the consultants to raise their projection for March to 3.4 million tons. DTN says Jordan is tendering for 120,000 tons of milling wheat and Algeria is in the market for 50,000 tons of durum.