Market News

Soybeans see more modest gains

Soybeans were modestly higher on short covering and technical buying. Near-term conditions in Argentina are hot and dry with a lot of uncertainties about the forecasted late week rain. This recent weather has likely trimmed at least some of Argentina’s yield potential, but if this rain materializes as expected, it should help stabilize things. Brazil’s harvest is moving forward, with lower crop estimates likely Thursday from USDA and CONAB. It’s going to be a big crop and will continue to limit export demand for U.S. beans, but production will fall sharply from the initial estimates due to weather issues impacting planting and development. Safras e Mercado says 31.9% of Brazil’s expected 2023/24 crop has been marketed, compared to 29.1% a month ago. Some of that is probably China locking in at cheaper prices, which could lead to cancelations on previously purchased U.S. beans in the coming week. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was mixed, adjusting spreads, with nearby March through December 2024 modestly lower. Corn is watching development weather in Argentina, along with second crop planting in Brazil. This next round of USDA could be fairly quiet after January’s fireworks, but if there is going to be a surprise, it could be in South American production. The big question is how many acres will actually be planted for Brazil’s second crop, the largest of the three and the source of most of their exports. Stateside, the trade is monitoring demand and conditions ahead of spring planting. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday, while the USDA’s Prospective Plantings report will be released at the end of March.

The wheat complex was mixed, mostly modestly higher. The wheat complex is oversold and the dollar was down for most of the session, but any significant upside will continue to be limited by slow export demand. Russia continues to have a hold over the global market due to a price advantage, which has limited competition by the U.S., European Union, and others, including Ukraine, which has also seen trade impacted by the ongoing war. Russia and Turkey are reportedly set to meet next week to discuss restarting the Black Sea Grain Initiative. Most forecasts have more rain in key U.S. winter wheat growing areas starting later this week. The widespread precipitation received in many areas this winter should have winter wheat emerging in much better condition this spring than last spring. The USDA has two more rounds of monthly state crop and weather stories before weekly numbers resume in April. Wheat’s waiting for Thursday, expecting most of the USDA adjustments to be on the global side of the ledger. Statistics Canada’s updated grain stocks estimates are also out Thursday.