Market News

Soybeans up on vegetable oil demand

Soybeans were higher on commercial and technical buying, still sharply higher, despite closing below the session’s highs. Beans followed the lead of vegetable oils, with palm oil sharply higher heading into the U.S. session and U.S. soybean oil futures notching fresh contract highs. Harvest remains slow in parts of northern Brazil, with dry weather a factor in parts of southern Brazil and Argentina. Still, recent rain in parts of Argentina has improved crop prospects somewhat. DTN says that even with harvest delays, Brazil’s FOB basis and moved lower and there’s talk of China buying Brazilian beans. China hasn’t made a purchase of U.S. beans yet this month, neither has unknown destinations. The USDA’s next set of official production projections for South America is out March 9^th, with the rest of the supply and demand update. Soybean meal and oil were sharply higher, with oil leading the way on that vegetable oil strength.

Corn was mixed on commercial spread adjustments, with nearby months up and deferred contracts steady to weak. Corn is also watching conditions in South America, with significant delays in second crop corn planting in Brazil. That’s Brazil’s biggest crop and the source of most of their exports. Recent rain in parts of Argentina will likely help the crop, but some yield potential has likely been lost after a late start to the planting season and mostly dry conditions for much of February. Demand is solid, even with no new announced sales since February 12^th, but contracts are technically overbought. The trade is also keeping an eye on U.S. conditions ahead of planting. The USDA’s prospective planting and quarterly stocks numbers are out March 31^st. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol supply and production numbers are out Wednesday.

The wheat complex was mixed, with Chicago following corn and Kansas City and Minneapolis modestly lower on profit taking. U.S. winter wheat conditions are mixed, with any probable winterkill damage an unknown until spring. Drought or near drought conditions are another big issue in most of the Plains. The trade is also continuing to monitor winterkill potential in parts of Russia and Ukraine, overwintering weather in the European Union, conditions ahead of spring wheat planting in the northern U.S. Plains and Canada, and harvest activity in Australia. The European Union’s crop monitoring agency MARS says recent cold conditions had a minimal impact on the E.U. wheat crop.