Soybean, corn futures drop
Soybeans were sharply lower on fund and technical selling. Tuesday’s USDA numbers were no surprise, very close to expectations, and in the trade’s assessment, weren’t neutral to bullish enough. The sole change to the domestic balance sheet for beans was a higher export guess, while the USDA didn’t make any changes to South American production numbers. Most forecasts have more near-term harvest delaying rain in parts of Brazil and a drier pattern in most of Argentina for much of this month. CONAB’s next set of estimates for Brazil is out Thursday. China hasn’t made an announced purchase of U.S. beans in several days, with the USDA’s weekly export numbers also scheduled for Thursday. The trade is also keeping an eye on U.S. conditions ahead of widespread planting, with the USDA’s prospective planting numbers due March 31st, along with quarterly grain stocks. Soybean meal and oil were lower, following beans.
Corn was sharply lower on fund and technical selling. The USDA lowered U.S. ending stocks by a smaller than expected amount, at least this month. Still, that potential adjustment in March will depend on signals from a number of sectors, including ethanol, feed use, and whether or not some will have to import corn to meet needs. Corn is also watching South America, especially the slow second crop planting pace in Brazil and potential yield loss in Argentina. Wednesday morning, unknown destinations canceled on 132,000 tons of previously purchased 2020/21 U.S. corn. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 937,000 barrels a day, up 1,000 on the week, but down 96,000 on the year, with stocks of 23.796 million barrels, a decline of 520,000 from the previous week and 562,000 from this time last year.
The wheat complex was lower on fund and technical selling but didn’t see losses to the degree soybeans and corn experienced. Recent precipitation should help U.S. winter wheat and for now, the winterkill concerns are minimal. There is the potential for winterkill in the U.S., European Union, and the Black Sea region, depending on snow cover. The complex is also watching conditions ahead of spring wheat planting in the U.S. and Canada and harvest activity in Australia. The USDA did cut world ending stocks by a larger than expected amount Tuesday, but at more than 300 million tons, the supply outlook is still neutral to bearish, and U.S. ending stocks were unchanged, when many analysts were expecting a modest reduction. The next set of supply and demand estimates is out March 9th. France’s AgriMer has raised its expectations for soft wheat planted area, with 2021 now expected to be up more than 15% from 2020 and slightly above the five-year average. AgriMer has 2020/21 soft wheat exports outside of the European Union at 7.45 million tons, compared to the January guess of 7.27 million and the 2019/20 total of 13.57 million tons. DTN says Japan bought 86,845 tons of food wheat from the U.S. and Canada.