Market News

Soybeans mixed, corn, wheat down ahead of USDA reports

Soybeans steady to modestly higher. Beans are oversold, having dropped nearly a dollar since the end of 2023, pressured by rain in dry parts of Brazil and generally favorable conditions in Argentina. The trade was getting ready for several USDA reports out Friday, including supply and demand numbers. There could be an adjustment to Brazil’s bean crop, but the USDA might hew conservative, with CONAB remaining above 155 million tons, for now. The major domestic reports will also be watched very closely. U.S. export sales last week were 10.3 million bushels, above the prior week, but below average, mainly to Japan and China, with a cancelation by unknown destinations. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The USDA’s Foreign Ag Service lowered its 2022/23 soybean production guess for Argentina to 20.5 million tons, while projecting 2023/24 at 50.5 million The FAS anticipates an increase in domestic crush due to the larger crop. The big question for Argentina is the impact of proposed changes to export tariffs under the new presidential administration. The Rosario Grain Exchange estimates Argentina’s crop at 52 million tons, up 2 million from the prior projection.

Corn was modestly lower on fund and technical selling. The big feature was preparation for Friday’s USDA numbers, especially grain stocks and final 2023 U.S. production totals. Corn is already looking at a fairly large 2023/24 ending stocks projection and any increase in supply could have a big negative effect on the market. The trade is also watching signals on 2024 U.S. planting. Weekly export sales were 19.2 million tons, up on the week, but down from the four-week average. The leading buyers were Colombia and Japan, with a significant cancelation by unknown. The overall 2023/24 U.S. pace remains ahead of 2022/23 despite the movement issues caused by low levels in the Panama Canal and the conflict in the Red Sea. Mexico bought 175,000 tons of U.S. corn for delivery this marketing year. That was the first announced U.S. export sale of the year, with the last reported purchase of any commodity on December 19^th, 2023. The Rosario Grain Exchange raised its corn outlook for Argentina to 59 million tons, 3 million larger than the last guess.

The wheat complex was lower on fund and technical selling, along with the lower dollar during the session. Most of the U.S. winter wheat crop is expected to be protected from winterkill by the recent snow cover. There are also winterkill concerns in portions of Russia and Ukraine. Still, damage is hard to quantify until the crop emerges from dormancy. The USDA’s winter wheat planted area numbers are also out Friday at Noon Eastern/11 Central. Acreage is expected to be below a year ago. Aside from that report, the biggest changes for wheat should be on the international side of the ledger. U.S. export sales last week were a scant 4.7 million bushels, most of that hard red spring, with no reported soft red winter purchases. The leading buyers were China and Egypt, with a big reduction by unknown destinations. Russia remains in control of the export market due to a price advantage. The Rosario Grain Exchange left its wheat production for Argentina unchanged at 14.5 million tons.