Market News

Soybeans pull up from session lows

Soybeans were steady to fractionally higher, climbing back from modest losses late in the session. The USDA lowered domestic 2019/20 ending stocks, expecting better export demand, but also lowered the price outlook for the current marketing year. Brazil’s production and export guesses, and China’s import estimate, were up on the month. The production and export estimates, including soybean product exports, for Argentina were unchanged. CONAB sees Brazil’s soybean crop at 123.2 million tons, compared to the new USDA guess of 125 million. Brazil’s harvest is 16% complete and their prices continue to have a competitive advantage over U.S. supplies. Stateside, beans are waiting to see how much corn planting is delayed in some areas by wet weather, which could shift planting intentions somewhat. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Still, that was largely technical, with Malaysian palm oil futures sharply lower heading into the U.S. session because of expectations for a bigger crop and slower demand from China and India.

Corn was modestly lower on fund and technical selling. USDA left U.S. corn ending stocks unchanged and lowered world supplies a little, but there’s still plenty of corn available. The USDA raised its’ corn for ethanol use estimate while cutting the export outlook, with each adjustment by 50 million bushels, accounting for the lack of change in ending stocks. Conditions generally look good for most of South America. CONAB pegs Brazil’s first corn crop at 26.1 million tons and has the second crop at 74.4 million, for total production of 100.5 million, compared to the new official USDA guess of 101 million. That’s also the updated USDA attaché estimate. Second crop planted area could rise on the drop in Brazil’s currency. Also according to the USDA’s attaché for Brazil, 2018/19 exports were 42.5 million tons, with 2019/20 at 34 million. The USDA raised production projections for South Africa and Ukraine. A South Korean feed mill is reportedly tendering for 140,000 tons of corn. Corn is also watching conditions ahead of widespread U.S. planting. Ethanol futures were mostly weak. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was lower on fund and technical selling, with Chicago leading the way down on long liquidation. The USDA lowered U.S. wheat ending stocks and raised exports, but world production and stocks were only down slightly, leaving the fundamental outlook essentially neutral. New supply and demand numbers are out March 10^th. U.S. winter wheat conditions remain mixed, better for hard red than soft red and there are some early expectations for spring wheat planting delays in the northern U.S. Plains. DTN says Egypt is tendering for an unspecified amount of wheat. The U.S. is a part of the tender, but the business expected to go elsewhere. CONAB expects Brazil’s wheat planted area to be about steady with a year ago; planting starts in April. The USDA’s attaché in Brazil has 2019/20 wheat production at 5.15 million tons, compared to 5.428 million in 2018/19, with imports of 7.5 million tons, compared to 7.02 million last marketing year. Out of that export total, the U.S. is expected to supply 400,000 tons, compared to 314,000 the marketing year before.