Soybeans down on rain potential in South America
January 14, 2022 By John Perkins Filed Under: Closing Futures / Livestock Briefs, Crops Markets, Market News
Soybeans were lower on fund and technical selling, capping a bearish week. Most forecasts had at least some rain in dry parts of South America over the coming week, but at least some damage has been done. Several government and private bodies have recently issued lower production projections for both Argentina and Brazil due to hot, dry weather. Portions of central and northern Brazil are expected to see a drier pattern, which would help with the harvest pace. Exports continue to be slower than expected, limiting any significant upside. Brazil’s faster than average planting pace led to Chinese buyers locking in purchases late last year and early this year. While some of those could be canceled, Brazil is still on pace for a large, if not record, crop, just not as large as some were expecting earlier in the season. Soybean meal and oil were mostly lower on spread trade, fund selling and position squaring ahead of January contracts’ expiration. Spain bought 100,000 tons of 2022/23 U.S. soybean meal Friday morning.Corn was mostly modestly higher on bull spreading but finished the week lower. Corn was also watching conditions in Argentina and southern Brazil, with good chances of rain late into the coming week. That should help stabilize crops and a faster harvest pace in central and northern Brazil will allow producers to start planting the critical second corn crop. Mexico bought 100,422 tons of old crop U.S. corn Friday morning. That brought the week to date total for announced sales to 232,422 tons, with 177,422 for delivery during the current marketing year. Still, exports remain slower than anticipated, with plenty of competition with Ukraine for Chinese business. Ethanol futures were unchanged. The trade continues to monitor ethanol margins, which have dipped as production slows and stocks rise to near one-year highs.The wheat complex was modestly to sharply lower on fund and technical selling, extending the week’s losses. Those losses were despite expanding drought in the Plains, stressing hard red winter wheat. That is also having an impact on portions of the white winter crop and is expected to be an issue for spring wheat planting in the northwestern Plains. The trade is continuing to monitor overwintering conditions in Europe and the Black Sea region, simmering political tensions between Russia and Ukraine, and harvest activity in Argentina and Australia. The USDA’s attaché in India estimates 2021/22 wheat production at 109.52 million tons, matching the official estimate, and sees exports at 6.5 million tons, compared to the official guess of 5.25 million and the 2020/21 total of 2.561 million tons. New Delhi says it will extend a free food grains program through the end of March, releasing an additional 16 million tons from state supplies.
Your email address will not be published.
Subscribe for our newsletter today and receive relevant news straight to your inbox!