Soybeans eke out modest gains, corn closes mixed

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Soybeans eke out modest gains, corn closes mixed

Soybeans were modestly higher on commercial and technical buying. Weekly export sales were bullish, with China leading the way for old and new crop, and shipments remain ahead of what’s needed to meet projections for the current marketing year. Brazil’s harvest is slower than average, at just 2% complete, the slowest in a decade, with rain shifting from southern to central and northern areas, delaying harvest activity there. Excessive moisture has caused at least some damage, which follows the drier than normal weather that delayed planting. That slow harvest is impacting Brazil’s exports, with just 49,000 tons of beans exported during January, the lowest total for the month in years. The Buenos Aires Grain Exchange says 13% of Argentina’s crop is rated poor to very poor, up 3% on the week, with the nation expected to see a drier pattern over the next week. Soybean meal was lower and bean oil was higher on product spread adjustments. U.S. soybean meal exports were up on the week, while bean oil sales were down. Statistics Canada’s December 31st grain stocks numbers are out Friday, with the average guess for canola at 12.3 million tons, compared to 15.907 million a year ago.

Corn was mixed, mostly firm, on commercial spread trade, with nearby contracts peeling back from the highs set early in the session. Last week’s export sales were the largest on record at 292.8 million bushels, but that was old news after those huge sales to China, and shipments remain slow. There were also more than 400,000 tons of U.S. corn sold last week to unknown destinations, which could turn out to be China when it’s time for delivery. Weekly sorghum export sales were sharply lower than the previous week, with sorghum also seeing slow shipments. Corn is also watching South America, especially the slow planting pace for Brazil’s second crop. The USDA’s attaché in Brazil lowered the production outlook to 105 million tons, 2 million less than their last guess and 4 million under the official USDA estimate from January, because of expectations for lower yields. Brazil’s 2020/21 corn exports are expected to be 37 million tons, up 1.5 million on the year. Stateside, the trade is watching conditions ahead of widespread planting, with the USDA’s prospective planting numbers out March 31st. Quarterly grain stocks are also scheduled for the end of next month. The Buenos Aires Grain Exchange says 10% of Argentina’s crop is in poor to very poor condition, compared to 8% last week. The trade is also monitoring a truck strike in Argentina that is disrupting exports from the key port of Rosario. Ethanol futures were unchanged.

The wheat complex was lower on fund and technical selling, along with higher trade in the U.S. Dollar. Weekly export numbers were neutral at best and the global supply outlook continues to be bearish ahead of the next set of supply and demand estimates out February 9th. The trade is also keeping an eye on potential damage to U.S. winter wheat as a cold snap gets set to hit many key growing areas without adequate snow cover. The trade is also watching overwintering conditions in the European Union, Russia, and Ukraine, and harvest activity in Australia. The early stages of Russia’s permanent formula-based export tax go into effect April 1st, replacing the fixed rate tariff of 25 Euros per ton that starts February 15th. Exporters will have to register their sales at one of the nation’s exchanges, which will then set the rate under the formula. More details are expected in coming weeks. That could drive at least some business to the U.S. The USDA’s attaché for Brazil sees wheat production at 6.25 million tons, compared to 5.15 million last year, with imports of 6.3 million tons, including an anticipated 750,000 tons from the U.S. Ahead of Friday’s stocks reports, Statistics Canada is expected to show all wheat stocks at 25.4 million tons, compared to 25.85 million a year ago.