Market News

Soybeans hit by profit taking

Soybeans were sharply lower on profit taking and technical selling. Near-term weather in parts of South America continues to look hot and dry, but medium-term forecasts do have a chance of rain for portions of Argentina and southern Brazil. Estimates for Paraguay have also fallen recently, with hot, dry weather pushing yields well below optimal levels. Early harvest activity is underway in a couple of key states in Brazil. Safras e Mercado says 95% of Brazil’s 2020/21 crop has been sold, slightly ahead of average, with 36.5% of the 2021/22 crop marketed. The trade was also getting ready for Tuesday’s numbers for Brazil from CONAB and Wednesday’s USDA reports. Export inspections were down on the week and the year, with China and Japan topping the list. Soybean meal and oil were sharply lower on profit taking.

Corn was mixed, adjusting spreads. Corn is also getting ready for this week’s numbers, while watching weather in South America. The hot, dry weather impact soybeans in Argentina and southern Brazil is hitting corn as well. The most closely watched corn crop in South America will be Brazil’s second corn crop, the source of most of their exports. Mexico bought 132,000 tons of U.S. corn, with 77,000 tons for 2021/22 delivery and 55,000 tons for 2022/23. Mexico also bought old crop corn last week. Export inspections last week topped a million tons, mainly to Mexico and China. Ethanol futures were unchanged.

The wheat complex was mixed, with Chicago and Kansas City up and Minneapolis down. Drought continues to be an issue in the southern U.S. Plains, while parts of the eastern Midwest are too wet. The trade is also monitoring overwintering conditions in Europe, Russia, and Ukraine, along with conditions ahead of spring wheat planting in the northern and northwestern U.S. Plains and Canada. Contracts are oversold but there was some pressure is from expected record crops in Argentina and Australia, in addition to the slow export demand. Export inspections were above a week ago, but below a year ago, with Japan and Indonesia leading the list of recipients. China reportedly sold all 506,568 tons of wheat at last week’s state auction.