Up day for soybeans, corn, and wheat
Soybeans were higher on fund and technical buying. The trade is monitoring rain totals and coverage in Argentina, with recent events falling short of expectations. There are concerns about dry weather in southern Brazil and some early harvest delays in that nation, but Brazil still seems to be on pace for record production this year. China bought 106,000 tons of 2023/24 U.S. soybeans Thursday morning, the first announced sale of any U.S. commodity to China since early December. The weekly 2022/23 sales numbers were good at 1.15 million tons, mainly to China and the Netherlands, with a cancellation by unknown destinations. Export sales are ahead of last year’s pace but will likely start to tail off as Brazil’s harvest advances. Soybean meal and oil were higher, following the lead of beans. Bean oil is also continuing to benefit from biofuels use expectations. The USDA’s next round of supply and demand estimates is out February 8th.
Corn was higher on fund and technical buying. Corn is watching weather in South America, with recent rainfall in Argentina not meeting forecast projections. Conditions for most of Brazil look good, but the true test will be planting and development weather for the second crop, which is planted after soybeans are harvested and will hit the export market this summer. Export demand is disappointing but is expected to improve in the coming weeks because of strong old and first crop sales by Brazil, drought in Argentina, and a slower export pace out of Ukraine. Corn export sales last week were just over 900,000 tons, short of the previous week, but larger than average, primarily to Mexico and Colombia. The USDA’s attaché in China estimates 2022/23 domestic production at 277.203 million tons, up slightly from the last guess on better yields in the North China Plain, while projecting imports at 18 million tons, with a significant amount of that expected to be sourced from Brazil.
The wheat complex was higher on fund and technical buying. There are concerns about winterkill in parts of the U.S. hard red winter growing region. Recent snow in the Plains has benefitted parts of the region, but not enough to break drought conditions and did miss some areas. While temperature forecasts have moderated a little, bitterly cold conditions are still possible next week in hard and soft red winter growing areas. The USDA’s updated state crop and weather stories are out next week. Feed wheat demand is reportedly increasing, which could boost domestic demand and U.S. export sales. Sales last week were slightly above 500,000 tons, quite a bit larger than average, with Japan and Mexico topping the list. There are also some 2023/24 U.S. wheat purchased by Mexico. Nearing the fourth quarter of the marketing year, hard red spring and white winter are ahead of the respective 2021/22 paces, with hard and soft red winter trailing. Russia continues to hold most of the export market share due to price, Ukraine is still an exporter, albeit at a lower volume due to slower inspections by Russia, and Australia’s new crop is starting to move out. Iraq reportedly bought 150,000 tons of wheat from Australia.