Broader market losses push soybeans, corn lower
Soybeans were sharply lower on fund and technical selling, with the May contracts at a more than nine month low. Commodities generally responded to another drop in the broader market on coronavirus concerns. Unknown destinations bought 123,500 tons of 2019/20 U.S. beans Monday morning, but Brazil’s beans still have a price advantage over U.S. supplies. Even as the U.S. dollar has dropped, the Brazilian real has also declined and is near historic lows against the dollar. Brazil’s soybean harvest is reportedly past the halfway mark. That sale to unknown might be China, but it might be Egypt or any other nation that buys beans, as China has yet to noticeably step up purchases of U.S. beans because of that competitive advantage. China’s General Administration of Customs says soybean imports for January and February were 13.51 million tons, compared to 11.83 million the year before. Soybean meal and oil were sharply lower, following the lead of beans and many other markets. One of those was crude oil, which was pressured by Saudi Arabia’s decision to increase production and lower prices, widely perceived as a shot at Russia. Crude oil saw its’ biggest drop since the 1991 Gulf War and the Dow Jones Industrial Average had its’ worst day since 2008. Weekly export inspections were bearish.
Corn was modestly lower on fund and technical selling. Corn also followed the lead of the broader market, concerned about slower global economic growth, but losses were moderated by oversold indicators and the probability of early planting delays in the U.S. The USDA’s prospective planting numbers are out on the 31st, along with quarterly gain stocks. Dry parts of Argentina and Brazil are expected to receive rain later this week. Ethanol futures were lower. Weekly corn export inspections were bearish and while sorghum inspections were neutral, they were down on the week and the year.
The wheat complex was mixed, mostly lower. Chicago was up on the tight supply of soft red winter wheat and excessively wet conditions in part of that growing region. U.S. hard red winter conditions are good and spring wheat planting could get an early start, pressuring Kansas City and Minneapolis, respectively. Losses were somewhat limited by the lower dollar and oversold signals. Paris milling wheat futures were down sharply ahead of the U.S. session, adding to the general negativity. Weekly export inspections were bearish and so is the global fundamental outlook, with new USDA supply and demand estimates out Tuesday at Noon Eastern/11 Central. Ahead of the numbers, most analysts expect smaller production estimates for some export competitors to be canceled out by increased expectations for other nations. Overall, this set of numbers is not expected to reflect a big increase in demand from China and the impact of coronavirus on this report is unknown. DTN says Algeria is tendering for 50,000 tons of milling wheat.