Rally resumes for corn, soybeans, wheat
Soybeans were sharply higher on commercial and technical buying, more than recovering Wednesday’s losses and making new highs. Export sales were better than expected, China led the way, recovering from the previous week’s marketing year low, and part of the session’s gains were likely linked to demand rationing. China’s General Administration of Customs says it bought 100.327 million tons of soybeans in 2020, a record for any year and up 13.3% from 2019’s total of 88.513 million tons. December imports were 7.524 million tons, below November and December 2019 levels. Beans are continuing to monitor development weather in South America and early harvest activity in Brazil. The Buenos Aires Grain Exchange says 19% of Argentina’s soybean crop is in poor to very poor condition. Soybean meal and oil were higher, supported by commercial buying. Soybean meal export sales were a marketing year high, while bean oil was up sharply on the week, but well below the four-week average.
Corn was higher on commercial and technical buying, with March establishing a new high as contracts rallied after a mixed start to the session. Corn export sales were better than expected, Japan and unknown destinations were the top buyers, with the U.S. holding a price advantage into spring. Near-term development weather looks good for most of Argentina and Brazil, with most forecasts showing beneficial rain over the next couple of weeks. Grain groups in Argentina have ended a strike over Buenos Aires’ corn export restrictions after the government halted export restrictions. Ethanol futures were unchanged. Sorghum export sales were up sharply on the week, with unknown destinations and China the listed purchasers. DTN says South Korea bought 66,000 tons of optional origin corn, which will likely end up coming from Brazil.
The wheat complex was higher on commercial and technical buying, along with weakness in the U.S. dollar. World wheat futures were higher heading into the U.S. session on concerns about export restrictions from a couple of major sellers. Drought is expanding in parts of the U.S. Plains and while the snowfall in northern parts of the region should help, it won’t be enough to reverse conditions. Weekly U.S. export sales were bearish, 49% lower than average, continuing to slow down in the second half of the marketing year, but the higher export tax proposal by Russia and potential export restrictions by Ukraine could help business. The Rosario Grain Exchange estimates Argentina’s wheat crop at 17 million tons, a little bit less than the USDA’s most recent guess. The European Commission sees soft wheat production at 129.7 million tons, up 9% on the year. DTN says Jordan bought 60,000 tons of milling wheat after initially tendering for 120,000 tons, while Japan is in the market for 80,000 tons of feed wheat.