Market News

Soybeans, corn firm with muted response to USDA

Soybeans were modestly higher on short covering and technical buying, with a quiet response to Friday’s slew of USDA numbers, but a modest week to week gain. The USDA says 2019’s crop was down 20% from 2018, with a resurvey in some states because of harvest delays. If there are changes, they’ll be published in spring. Quarterly stocks were down on the year, U.S. ending stocks were unchanged and there weren’t a lot of changes to the global side of the ledger either. That includes steady outlooks for production exports in Argentina and Brazil and imports by China. The trade is monitoring some weather issues in South America, parts of the region will need timely rain, and waiting to see what happens after the signing of phase one of the trade agreement with China. Weekly export numbers were neutral to bearish, with sales up slightly from the previous week’s marketing year low and minimal demand from China, but shipments were good. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying, closing fractionally mixed on the week, maintaining the recent sideways pattern. 2019’s corn crop was 5% smaller than a year ago and will also be subject to a resurvey because of harvest delays. Still, the number was up slightly on the month. Quarterly corn stocks were 5% lower and ending stocks were a little tighter, even with a higher beginning stocks total following an upward revision to last year’s production total and lower export use. Weekly export sales were a new marketing year low, continuing to reflect the increased competition from South America and Ukraine. Ethanol futures were higher. The USDA left the corn for ethanol use unchanged from December. Corn is also waiting to see what happens with China, while waiting for a Senate vote on the USMCA.

The wheat complex was mostly modestly higher, with Chicago mixed on spread adjustments and Kansas City and Minneapolis up modestly. For the week, the March contract for all three exchanges gained at least a dime, with the best gain for Kansas City. Winter wheat planted area is down 1% on the year, the second lowest on record, with a decrease for hard red winter and an increase for soft red. U.S. and world wheat ending stocks were down modestly on the month, while quarterly stocks were below a year ago, with better usage in the second quarter of 2019/20 than during the same period in 2018/19. Globally, the USDA did lower the production outlooks for Australia and Russia but did raise expectations for the European Union. Weekly export sales on wheat were a new marketing year low. The Buenos Aires Grain Exchange says 96% of Argentina’s crop is harvested, with production pegged at 18.5 million tons. DTN says flour millers from Thailand bought 55,000 tons of U.S. wheat.