Market News

Soybeans decline on profit taking, dollar strength

Soybeans were lower on profit taking and technical selling, in addition to the higher move in the dollar during the session. There’s more rain in the forecast for Argentina, while harvest conditions generally look good in Brazil. The USDA’s next round of supply, demand, and production numbers is out March 8^th, with CONAB’s updated outlook for Brazil scheduled for the 12^th. Export demand is slow, with Brazil’s prices more than a dollar below the U.S., due in part to that relative strength in the dollar against the real. That gap might continue to grow as Brazil’s harvest moves forward. Soybean meal was down on profit taking, contributing to the losses in beans, while bean oil was up on demand expectations largely tied to renewable fuels. NOPA member crush numbers for January are out later this week with an average guess of 189.928 million bushels. That’d be about 3% less than in December, but up 6% from January 2023. Soybean oil stocks are expected to be up on the month.

Corn closed steady to fractionally higher after an up and down session. Corn is watching development weather in Argentina and second crop planting in Brazil. That second crop in Brazil remains a huge question mark because of the soybean planting delays earlier in the season and talk some producers switched to other crops. Brazil’s second crop is the largest of the three and the source of most of their exports. The first is primarily used domestically, with some exported, while the much smaller third crop is largely regional. Export and ethanol demand are good, but the U.S. has a bearish supply outlook. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. The trade is also waiting to see what comes out of the USDA’s Ag Outlook Forum later this week.

The wheat complex was steady to lower. Slow export demand and the relative strength of the dollar continue to be the big bearish factors for wheat. Russia continues to be in control of the global wheat market due to a significant price advantage, cutting into not only U.S. market share, but also the market share of the European Union and Ukraine. Russia’s Ag Ministry is proposing raising grain export quotas. Egypt’s Supply Ministry says it has nearly four and a half months of wheat in government reserves. France’s Ag Ministry says soft winter wheat planted area was down 7.7% on the year due to weather issues. Most U.S. winter wheat areas look dry over the near-term, but the crop is in much better shape this year than last year ahead of the emergence from dormancy. There have been some recent condition downgrades in weekly reports for the Plains states, but again, conditions generally remain much better than this time last year. The USDA will release two more sets of monthly state crop story compilations ahead of the resumption of weekly national and state reports in early April.