Market News

Soybeans, corn down on South American weather

Soybeans were lower on fund and technical selling. Trade negotiations with China are ongoing and China’s President is expected to meet the U.S. delegation Friday. President Trump is expected to meet with President Xi in March, after the official end of this round of talks. Beans are also watching development and harvest conditions in South America. The Rosario Grain Exchange raised its outlook for Argentina’s crop to 52 million tons, less than the USDA’s most recent guess, but up sharply on the year. According to DTN, China is buying new crop beans from Brazil. China’s Administration of Customs says soybean imports for January were 7.38 million tons, compared to 5.72 million in December and 8.48 million for January 2018. In a delayed set of weekly export sales numbers, for the week ending January 3rd, 2018/19 soybeans were a net reduction of 612,000 tons (22.5 million bushels), following significant cancellations by China and unknown destinations. 2019/20 sales of 1,100 tons were to Japan. Soybean meal and oil were lower. In those delayed export numbers, 2018/19 soybean meal sales were 124,700 tons, up sharply on the week, but down 39% from the four-week average, Vietnam was the top buyer, and soybean oil export sales were a new marketing year low at 2,200 tons. Thursday afternoon, all indications were that President Trump would sign the budget deal, avoiding another shutdown, while also declaring a national emergency to fund the border wall.

Corn was lower on fund and technical selling. Corn was also watching those trade negotiations and weather in Argentina and Brazil, with generally non-threatening to favorable weather in most forecasts over the near-term. Both of those export competitors are expected to harvest large crops this year. There was more talk of new export demand from China, but nothing surfaced Thursday. According to DTN, JCI, a Chinese consulting firm, expects Beijing to import 14.5 million tons of corn this year. The delayed export numbers for corn showed 2018/19 sales at 459,800 tons (18.1 million bushels), 9% lower than the previous week and 64% below the four-week average, with Mexico the leading weekly buyer. Ethanol futures were lower, as the industry monitors margins and waits for E15 details and potential EPA policy changes. Sorghum export sales for the week ending January 3rd were 11,900 tons (500,000 bushels), up 34% on the week and 54% higher than the four-week average. Strategie Grains projects the European Union’s 2019/20 corn crop at 62.5 million tons, down 400,000 from the last guess.

The wheat complex was lower on fund and technical selling, with Chicago and Kansas City leading the way down, falling through what had been support. Most forecasts have a chance of winterkill is parts of the Plains and Midwest through the end of the month, but winter wheat is notoriously resilient. Grain movement in general through the Pacific Northwest has been slowed by weather. The trade is also monitoring the export market, especially for signs of new demand from China. The delayed weekly export sales report had wheat at a marketing year low of 131,200 tons (4.8 million bushels), a drop of 78% on the week and a decline of 78% from the four-week average. The report scheduled for February 22nd, delayed a day by Presidents’ Day, will cover the weeks of January 10th through February 14th, with regular reporting resuming March 1st. DTN says Tunisia bought 100,000 tons of milling wheat from an “unknown origin”. Strategie Grains has the 2019/20 European Union soft wheat crop at 146.4 million tons, with durum at 8 million, both below the prior estimates.