Market News
Soybeans end Friday, week mixed
Soybeans were mixed, mostly higher, on commercial spread trade, also ending the week mixed, favoring new crop over old crop. Rain in Brazil is shifting, now potentially delaying harvest in central and northern areas, while Argentina is expected to see a drier pattern for at least the next week. The USDA’s next set of production estimates for South America is out next Tuesday, along with the rest of the monthly supply and demand update. The USDA’s prospective planting and quarterly stocks numbers are due at the end of March. Nothing has changed fundamentally, especially the demand structure, and won’t until Brazil’s harvest advances further. Soybean meal was lower on profit taking and bean oil was mixed on spread adjustments inside the pit. Statistics Canada says canola stocks at the end of 2020 were 12.14 million tons, a drop of 23.7% from the end of 2019 due to a smaller crop and strong demand, especially to China, Mexico, and the United Arab Emirates. Canada’s soybean stocks were 3.688 million tons, a year-to-year decline of 9%.
Corn was mixed on commercial spread adjustments but managed a firm weekly finish. Corn is also watching weather in South America, with the slow soybean harvest in Brazil delaying second crop corn planting, further extending global reliance on U.S. corn. Technically, contracts are overbought, but the demand fundamentals remain strong. Friday morning, unknown destinations bought 101,600 tons of 2020/21 U.S. corn, which could turn out to be China when it’s time for delivery. The Buenos Aires Grain Exchange estimates 2020/21 corn production at 46 million tons, down 1 million from the last guess because of lower-than-expected yields. According to reports, Buenos Aires is still considering a cap on exports. Ethanol futures were unchanged. The Renewable Fuels Association says 2020 ethanol exports of 1.33 billion gallons were down 9% from 2019. That’s the smallest annual total since 2016, but still the fourth largest year on record. For December, the RFA says ethanol exports were 111.3 million gallons, 2% less than November, with DDGS sales of 842,738 tons, 9% less than the previous month and a new seven-month low. Statistics Canada says corn stocks on December 31st, 2020 were 11.055 million tons, up 3.3% on the year due to a larger crop.
The wheat complex was modestly higher on speculative and technical buying, tempering the weekly losses. The big concern for wheat continues to be drought or near drought conditions in much of the U.S. Plains. Winterkill could also be an issue in parts of the Midwest and Plains without adequate snow cover. 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. Statistics Canada says 2020 ended with a domestic wheat supply of 24.485 million tons, 3.8% lower than the year before, as exports rose 28.1% to 11.2 million tons, with Stats Can reporting record producer deliveries of 14.4 million tons. Export demand is slow, but Russia’s upcoming tariff and new formula-based sales plan should eventually send at least some business to the U.S. DTN says Japan bought 87,000 tons of wheat from the U.S. and Canada and Jordan is tendering for 120,000 tons of wheat.
