Soybeans, corn, wheat drift downward
Soybeans were lower on fund and technical selling. Weather should allow harvest activity should speed up in Brazil, but it’s the slowest pace in a decade and Argentina is expected to turn drier over the next few days. That slow harvest activity in Brazil likely means that nation won’t hit the expected monthly export projection. A truck strike that started this week will also hamper exports. Argentina’s exports during January were up sharply on the month after a handful of work stoppages related to commodity shipments were resolved. Fundamentally, there have been no changes and losses were limited by commercial support and solid overall demand. Most analysts expect another bullish set of quarterly stocks numbers for beans on March 31st. Soybean meal was mixed on old crop/new crop spread adjustments, while bean oil was down on profit taking and spillover from beans. Canola supplies in Canada have reportedly tightened significantly because of export demand.
Corn was lower on profit taking and technical selling, peeling back after the recent move to multi-year highs for spot March. Corn is also watching South America, especially the second crop planting delays in Brazil. That’s expected to lead to further global reliance on U.S. corn in the coming months. Tuesday, Mexico bought 115,000 tons of old crop U.S. corn, for a two-day total of 240,730 tons, all for 2020/21 delivery. Over the past six business days, old crop U.S. corn sales are 6,301,530 tons, with most of that purchased by China. There’s talk about China being interested in more U.S. corn and ethanol, but nothing has surfaced yet this week. The trade is also watching conditions in the U.S. ahead of spring planting, with the USDA’s Ag Outlook Forum later this month and the prospective planting report out at the end of next month. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. DTN says a feed mill in South Korea bought 60,000 tons of corn expected to be sourced from the U.S.
The wheat complex was lower on fund and technical selling. Demand for U.S. wheat continues to be slow, with a bearish global supply outlook ahead of the next set of supply and demand estimates out Tuesday, February 9th. Concerns about a cold snap in some winter wheat growing areas with no snow cover are on the back burner. The USDA’s next set of monthly state crop progress and condition reports is out late this month, with weekly reports resuming in April. The trade is also monitoring overwintering conditions in the European Union, Russia, and Ukraine, conditions ahead of spring wheat planting in the U.S. and Canada, and harvest activity in Australia. Reports out of Russia say Moscow’s tariffs on wheat exports will be replaced by a formula-based method to limit sales and ensure domestic supplies. Ukraine’s Ministry of the Economy says wheat exports are at 13 million tons, with a cap of 17.5 million tons for the current marketing year. DTN says Japan is tendering for 87,050 tons of food wheat from the U.S. and Canada, while Egypt bought a total of 480,000 tons of milling wheat from France, Romania, Russia, and Ukraine.