Profit taking sends soybeans sharply lower
Soybeans were sharply lower on profit taking and technical selling, but with most months still holding at support points due to demand rationing. Weekly old crop export sales were bearish, falling below a half million tons, while new crop sales were strong. China was the biggest 2020/21 buyer, while unknown destinations took the lead for 2021/22, and that could turn out to be China when it’s time for delivery. Parts of Argentina are drier heading into February and rain in parts of Brazil is delaying harvest and creating quality concerns. The USDA’s next set of supply and demand estimates is out February 9th. The trade is also keeping an eye on U.S. conditions in the countdown to widespread planting, with prospective planting numbers due March 31st, along with quarterly grain stocks. There’s increasing talk about the U.S. needing to import soybeans later this year because of the tight supply and strong overall demand. Soybean meal was lower on profit taking and bean oil was mixed with nearby contracts up and deferred months down on commercial spread adjustments.
Corn was mixed on commercial spread trade, with nearby months firm and deferred contracts modestly lower. Corn hit contract highs out of the gate as China bought 1.7 million tons of 2020/21 U.S. corn, bringing the running total for this week to more than 3.74 million tons. That is the sixth highest daily sale on record and follows up on the purchases by China of 1.36 million tons Tuesday and 680,000 tons Wednesday. Unknown destinations have also purchased 2020/21 U.S. corn this week, including 213,600 tons Thursday, and that could turn out to be China later. The weekly numbers were solid at 1.85 million tons, and next week’s report could come close to a marketing year high. Corn is also watching weather in South America, especially the early soybean harvest delays in Brazil, which could push back second crop corn planting. Ethanol futures were unchanged.
The wheat complex was lower on profit taking and technical selling, with most contracts posting double digit losses. Most forecasts have more precipitation in U.S. winter wheat growing areas and the weekly export numbers were neutral, China was the top buyer, continuing the slowdown during the second half of the marketing year. The trade is also monitoring harvest activity in Australia, along with overwintering conditions in the European Union, Russia, and Ukraine. Paris milling wheat was sharply lower heading into the U.S. session and Russia is reportedly accelerating sales ahead of the upcoming export tax. Moscow’s 25 Euro per ton tariff goes into effect February 15th, double March 1st, and runs through the end of their marketing year. DTN says Algeria bought between 630,000 and 660,000 tons of milling wheat from an unknown origin and Jordan purchased 60,000 tons of milling wheat, also from an unknown origin, while Japan picked up 60,715 tons of feed wheat from Australia. Argentina is reportedly looking into slowing down wheat exports without officially shutting down the sales registry. Buenos Aires tried to close export registrations on corn, but that was abandoned due to resistance from producers.