Market News

Soybeans, corn down ahead of WASDE

Soybeans were lower on profit taking and technical selling. The trade was getting ready for Wednesday’s supply and demand report, while watching Brazil’s harvest. There are some delays due to rain in central and northern growing areas, but Brazil remains on track for a record large crop. CONAB’s updated outlook for Brazil is out Thursday. USDA will likely lower its projection for Argentina’s crop following months of drought and some recent frost/freeze events. Analysts expect minimal changes to the domestic side of the balance sheet. Soybean meal futures were mixed on bear spreading and bean oil was down sharply on a drop in crude oil. China’s General Administration of Customs says January/February soybean imports were 16.17 million tons, a jump of more than 16% on the year, most of that from the U.S.

Corn was modestly lower on fund and technical selling. Analysts expect the USDA to lower its export estimate Wednesday, which would raise U.S. ending stocks. The window is opening a little for U.S. corn exports as other sellers run short of supplies, but with China largely absent from the U.S. corn market, it’d take unprecedented demand from other buyers to even pull 2022/23 close to 2021/22 in the new few months. Second crop planting is ongoing in Brazil with generally good conditions, even as Argentina remains locked in drought. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are also out Wednesday.

The wheat complex was mixed, with Chicago and Kansas City up on oversold signals and Minneapolis down, watching weather ahead of spring wheat planting. The USDA could raise U.S. ending stocks on slow export demand for U.S. wheat, while also potentially increasing the global production outlook. Global supplies remain tighter than a year ago due to strong overall demand. Russia continues to hold the lion’s share of the global wheat market, with Ukraine also still a major player. While it probably wouldn’t have much of an effect on U.S. sales, the trade remains curious about a potential extension of the Black Sea Grain Initiative set to expire on the 18^th. Drought conditions in parts of the U.S. Plains have eased somewhat, but more than half of the region continues to be afflicted by that condition. It was another mixed week for hard red winter conditions in the Plains. The USDA’s weekly U.S. crop reports resume in April. Australia’s government increased its production estimate to 39.2 million tons, up 2.6 million from the prior guess.