Wheat, corn up, also see weekly gains
Soybeans were lower on fund and technical selling, capping off a bearish week. Soybeans saw another round of liquidation and spillover from crude oil, watching Brazil’s record harvest move forward. The Buenos Aires Grain Exchange slashed its outlook for Argentina’s crop by 4 million tons to 29 million due to drought. That’s potentially the smallest crop in about two decades and there’s room for that number to fall further. The record crop in Brazil might not be enough to fully make up for the losses in Argentina. Crushers in Argentina have reportedly cut back hours dramatically due to a lack of supply, with increasing talk of imports. Argentina is normally the world’s largest exporter of soybean products. The USDA’s next set of supply and demand estimates is out April 11th, with CONAB’s updated outlook for Brazil scheduled for April 13th. Broad economic uncertainties were also an issue for soybeans. Export demand for U.S. beans has slowed down, but domestic demand continues to be solid and crush margins are bullish. Soybean meal and oil dropped in league with soybeans.
Corn was higher on short covering and technical buying, with the most active months finishing the week higher. China bought 2022/23 U.S. corn for the fourth day in a row, bringing the running total to 2.111 million tons. That fulfills nearly all of the recent trade rumors. China really was the missing piece during the first half of the marketing year, having instead turned to a combination of Brazil and Ukraine. Still, there are reports of China forward contracting part of Brazil’s expected record large second crop. Planting of that crop is ongoing. Additionally, it’s going to take strong sales and shipments for U.S. corn to make up for the slow pace during the first part of 2022/23. The Buenos Aires Grain Exchange lowered its outlook for Argentina’s corn crop to 36 million tons, 1.5 million less than the prior projection and the smallest in 7 years. Stateside, the trade’s watching weather ahead of planting in the Midwest, with prospective planting numbers, and quarterly grain stocks, out March 31st.
The wheat complex was higher on short covering and technical buying, along with the lower dollar, posting solid week-to-week gains. There were a lot of uncertainties about an extension of the Black Sea Grain Initiative during Friday’s session. Russia had been requesting a 60-day extension of the pact, contrary to every other party trying to extend the originally expected 120 days. Moscow has been insistent on the withdrawal of sanctions, even as it continues to attack Ukraine, while Kyiv wants increased access to ports and faster inspections. Forecasts for the southwestern Plains show the potential for expanding drought, at least until the pattern shifts to El Nino this summer. That’s likely going to have a big impact on this year’s hard red winter yield and rate of abandonment. Soft red winter conditions are comparatively good. There are indications there will be at least some spring wheat planting delay in parts of the northern U.S. Plains and Canada. The USDA’s weekly crop progress and condition reports resume the first Monday in April.