Soybeans recover some losses
Soybeans were modestly higher on short covering and technical buying, taking back a small part of Monday’s drop. Contracts saw an oversold bounce but remain cautious about the spread of coronavirus and the potential impact on demand. The Dow Jones Industrial Average started Tuesday’s session higher, but sold off in relatively quick fashion, pulling the index sharply lower for the second time this week. The World Health Organization has not declared a pandemic, but there have been several reports of new outbreaks this week. The center of the outbreak, China, hasn’t, at least yet, made an appreciable increase in purchases of U.S. ag goods as negotiated, but the USDA and USTR did report some progress Tuesday. 35% of Brazil’s soybean crop is harvested, including 70% of the crop in Mato Grosso, and Brazil’s bean prices are well below U.S. beans. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.
Corn was mixed, mostly fractionally higher. Corn consolidated, also watching conditions in South America, with dry parts of Argentina expected to see some rainfall over the next couple of weeks. Parts of Brazil are wetter than ideal, but by all indications, both countries are still on pace to produce large crops this year. Those two big South American producers and Ukraine have become increasingly competitive on the export market. Planting in the Midwest is still weeks away, but parts of the region are excessively wet. The USDA’s Prospective Planting report is out at the end of March. Two South Korean feed mills purchased a total of 123,000 tons of optional origin corn. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. U.S. ethanol, DDGS, sorghum, and corn are all reportedly purchase targets for China.
The wheat complex was mostly modestly higher, with nearby Chicago contracts up on spread trade and Kansas City and Minneapolis seeing oversold bounces. Export sales remain ahead of last year’s pace, but have slowed down, with plenty of competition and lower prices in Russia. The price slide in Russia is ongoing because of the potential for record large production, but the degree of decline has lessened. An official from Ukraine’s state weather forecast projects a “good” winter grain crop and doesn’t expect any significant weather threats for the remainder of the season. U.S. winter wheat conditions are mixed and general expectations are for at least some spring wheat planting delays in parts of the northern U.S. Plains. The USDA’s next set of supply and demand estimates is out March 10th. DTN says South Korea bought 60,000 tons of feed wheat and Tunisia purchased 125,000 tons of milling wheat, both from an “unknown origin.” The USDA says that after 12 years, all U.S. states can now export wheat to Kenya following the clearance of Idaho, Oregon, and Washington.