Soybeans, corn down on USDA acreage expectations
Soybeans were modestly lower on fund and technical selling, confirming a modestly lower weekly finish. The USDA is projecting a bigger crop this year, but tighter ending stocks on a jump in export and crush demand. China didn’t purchase any U.S. soybeans during the week ending February 13th and overall the weekly numbers were neutral. Still, that marketing week ended before China rolled back tariffs and confirmed one-year waivers, and the U.S. government expects China to meet purchase targets, even with the uncertainties created by the coronavirus. Beans continue to monitor conditions in South America and while parts of Brazil are dry, it might not have much of an impact at this late stage, with harvest ongoing. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was modestly lower on fund and technical selling, with the most active months posting slight week to week losses. The USDA expects an increase in acreage, crop size, and ending stocks this year. If realized, the USDA is projecting a record corn crop in 2020, but a lot of that will depend on weather, which might not cooperate with those expectations. Parts of the U.S. Midwest, Delta, and southeastern Corn Belt are excessively wet ahead of widespread planting. The USDA’s prospective planting numbers are out at the end of March. Weekly export numbers for corn were bearish. Sorghum numbers were bullish, China was the leading buyer. China is also reportedly interested in U.S. DDGS and ethanol. Ethanol futures were lower, even with the USDA projecting slightly increased corn for ethanol use in 2020/21. South Korea reportedly bought 135,000 tons of optional origin corn.
The wheat complex was modestly lower on fund and technical selling, but the March contracts at the three U.S. exchanges were firm to higher for the week. The USDA sees an all-time low for wheat acreage with steady exports and lower ending stocks. The global supply outlook continues to be bearish with the next set of supply and demand estimates out March 10th. Weekly export numbers were bearish and while total sales remain ahead of last marketing year, physical shipments are slow. China is reportedly interested in purchasing U.S. wheat. DTN says Taiwan bought 102,525 tons of U.S. wheat. Hard red winter wheat conditions generally look good, some soft red winter areas are excessively wet, and planting delays for spring wheat are probable in parts of the northern U.S. Plains.