Soybeans see profit taking
Soybeans were lower on profit taking and technical selling, but with the most active contracts holding above $14. Tuesday’s USDA numbers were bullish, but contracts were overbought after the recent strength. Losses were limited by demand rationing, a lower estimate for Brazil from CONAB, down 759,000 tons on the month at 133.692 million tons, and unknown destinations buying more U.S. beans Wednesday morning. Unknown picked up 464,300 tons, with 396,300 tons for 2020/21 and 68,000 tons for 2021/22, the fifth business day in a row with an announced sale. Those sales to unknown could turn out to be China when it’s time for delivery. The USDA’s weekly numbers are out Thursday at 8:30 Eastern/7:30 Central, but that won’t include the bulk of this most recent spate of sales. Soybean meal was lower on profit taking and oil followed meal and beans lower.
Corn was mixed on commercial spread adjustments, with March notching another contract high and the most active months staying above $5. Nearby months were up on follow through buying after the USDA confirmed a smaller U.S. crop and strong demand Tuesday. Brazil lowered its corn production guess, down 275,000 tons at 102.3 million, all of that out of the first crop, and Argentina has ended export restrictions following meetings this week with grain groups. Late last year, Buenos Aires say it would suspend the corn export registry until the end of February and earlier this month, it switched a 30,000 ton a day cap on sales. There’s talk of a trucker strike in Brazil starting February 1st in protest of high diesel prices, similar to a work stoppage in 2018. Russia is reportedly considering a 25 Euro per ton tax on corn exports starting February 1st, while livestock groups in Ukraine want Kyiv to limit 2020/21 corn exports to 22 million tons, following a decline in production from 2019 to 2020. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 941,000 barrels a day, up 6,000 on the week, but down 154,000 on the year, while stocks hit a 35-week high at 23.692 million barrels, an increase of 408,000 barrels on the week and 686,000 on the year.
The wheat complex was mixed, with Chicago down modestly and Kansas City and Minneapolis up modestly. Overall, wheat consolidated Wednesday, with some support from the lower U.S. and world ending stocks estimates. Russia is proposing raising its export tax to 45 Euros per ton starting March 15th, which could bring business to the U.S. Moscow’s duty on wheat exports starts at 25 Euros per ton on February 15th. The trade is monitoring overwintering conditions for wheat in the Black Sea region after dry conditions during planting and also keeping an eye on conditions in the U.S., with hard and soft red winter wheat in mixed shape. The USDA’s next set of state crop condition stories is out on January 25th. March Kansas City wheat hit a new two-year high during Wednesday’s session. DTN says Egypt passed on all offers for its wheat tender citing high prices, while South Korea bought 100,000 tons of wheat, 50,000 each from Australia and an unnamed seller.