Market News
Soybeans, corn up on Argentina weather issues
Soybeans were higher on speculative and technical buying. The trade is getting a look at possible weekend frost damage in parts of Argentina ahead of a return to a drier pattern. It’s roughly the equivalent of late July for crops in that part of South America, so this can be viewed as highly unusual. That capped off a week with wide-ranging temperatures and only scattered rainfall. It’s already been a long growing season for crops in Argentina, with drought pulling production projections well below initial expectations. That also supported soybean meal and oil as Argentina is usually the world’s leading exporter of soybean products. Brazil’s record harvest is slower than average, but still moving forward and any losses in Argentina are expected to be canceled out by larger than a year production in Brazil and Paraguay. U.S. export inspections were down on the week, up on the year, primarily to China and Germany, with 2022/23 inspections on pace to meet or exceed USDA projections.
Corn was modestly higher on speculative and technical buying. Corn is assessing frost and drought damage in Argentina, while watching the second crop planting pace in Brazil. The planting of that critical crop is behind average because of the slow soybean harvest pace. The USDA’s next round of supply and demand estimates is out March 8th, with CONAB’s updated outlook for Brazil set for March 9th. Export demand for U.S. corn is slow but should pick up steam in the next few weeks, with the window expected to last until July, when the second crop corn harvest in Brazil usually gets underway. U.S. corn export inspections last week were well below a year ago, with Mexico and Japan topping the list. Nearing the halfway point of the marketing year, U.S. corn inspections are behind last year’s pace by a wide margin. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday, delayed by Monday’s holiday.
The wheat complex was lower on fund and technical selling, along with the mostly higher trade in the dollar during the session. Most forecasts have heavy snow this week in parts of the central and northern Plains and upper Midwest, recharging soil moisture. Still, this week’s precipitation is probably going to miss some of the drier portions of the Plains. Soft red winter conditions are comparatively good and the complex has an eye on conditions in the northern U.S. Plains and Canada ahead of spring wheat planting. The trade is also monitoring the Black Sea region as the war in Ukraine enters its second year. Russia is making more overtures towards stepping up attacks and Moscow is complaining about some exports being limited by sanctions, even as Russian wheat controls the export market due to a price advantage. Ukraine is still exporting grain, albeit at a reduced pace due to slower inspections by Russia under the Black Sea Grain Initiative. Just outside of the final quarter of the 2022/23 marketing year for wheat, the pace continues to trail 2021/22, with inspections last week down from the previous week and the year before, mainly to Japan and Thailand.
Add Comment