Market News

Soybeans, corn, wheat all end session higher

Soybeans were higher on short covering and technical buying, taking back Monday’s losses and then some. Contracts saw an oversold bounce, with help from a higher move in bean meal, in addition to the lower dollar and higher crude oil during the session. Brazil’s harvest is ongoing with favorable conditions, including a drier pattern in parts of northern Brazil, and Argentina should see some rain next week, but will be largely hot and dry until then. Some private firms have issued more reduced estimates for Brazil’s crop as harvest numbers roll in, with a few now below the 150-million-ton mark. Soybean meal was up solidly on commercial and technical buying, while bean oil followed beans and meal. The USDA’s December soybean crush numbers are out Thursday with a record projection of 206.1 million bushels, with oil stocks expected to be up on the month, but down on the year.

Corn was higher on short covering and technical buying, pulling contracts slightly higher so far this week. Contracts bounced off the recent lows, watching South America. Those dry conditions in Argentina should lower crop ratings again this week, still holding well above a year ago, and second crop planting in Brazil is moving forward. The USDA’s updated supply, demand, and production projections and CONAB’s new outlook for Brazil are both scheduled for February 8^th. The U.S. Energy Information Administration’s weekly ethanol numbers are out this Wednesday. Last week, production fell sharply, largely due to weather, while stocks have grown for eight consecutive weeks. Domestically, the trade has an eye on precipitation ahead of spring planting.

The wheat complex was higher on short covering and technical buying, along with the weakness in the dollar. Wheat is oversold, but any upside will be limited by slow export demand. That’s due in part to the continued relative strength of the dollar against competing currencies. Russia remains in control of the export market and Ukraine continues to ship grain despite the ongoing war. The European Union says that since the start of the marketing year July 1^st, 2023 wheat exports are 18.791 million tons, 6% slower than a year ago. Condition ratings have improved in many, but not all, U.S. winter wheat growing states following the recent widespread precipitation. The USDA will issue two more rounds of monthly state crop and weather stories in late February and late March, ahead of weekly numbers resuming in April. There’s more rain in the forecast for the Plains this weekend and the eastern Midwest early next week.