Market News
USDA acreage expectations pressure soybeans, corn
Soybeans were lower on fund and technical selling. The USDA’s Ag Outlook Forum puts planted area at 90 million acres, up sharply on the year and a little larger than expected. The USDA is projecting the 2021/22 average farm price for beans at $11.25 per bushel. The USDA’s next set of estimates for the 2020/21 marketing year is out March 9th. The trade is continuing to monitor conditions in South America. Northern Brazil is expected to see more harvest delaying rain and while there is some rain in the forecast for Argentina, the net-drying effect is expected to continue. The Buenos Aires Grain Exchange says 11% of Argentina’s soybeans are in poor to very poor condition, compared to 8% last week. Brazil’s ANEC estimates February soybean exports at 6 million to 7.9 million tons, compared to 6.6 million in February 2020. There have been no new U.S. export sales announcements from the USDA in several days, with China’s Lunar New Year celebrations wrapping up this week. The USDA’s delayed weekly export sales numbers are out Friday morning. Soybean meal was lower and soybean oil was higher on the adjustment of product spreads driven by vegetable oil demand expectations.
Corn was steady to modestly lower on spread trade and technical selling. The USDA is projecting planted area at 92 million acres, 1.2 million more than last year, but a little lower than anticipated, with the survey-based prospective planting report out at the end of March, along with quarterly stocks data. The department’s 2021/22 price projection for corn is $4.20 per bushel. Ethanol production hit a 20-week low last week at 911,000 barrels a day, at least partially because of weather issues. Stocks were up about a half a million barrels on the week at 24.297 million. Ethanol futures were unchanged. Those cold weather issues are also creating issues for interior grain movement. Rain-related harvest delays in parts of Brazil are delaying second crop corn planting and the mostly net-dry conditions in Argentina will likely limit yield potential. The Buenos Aires Grain Exchange says 12% of Argentina’s crop is rated poor to very poor, compared to 9% a week ago. ANEC sees Brazil’s corn exports for February at 545,165 tons.
The wheat complex was higher on fund and technical buying. European wheat futures were higher heading into the U.S. session on concerns about supplies and questions about the impact of Russia’s export tax. Moscow’s initial tariff went into effect Monday and is scheduled to double in March, while a formula-based duty is scheduled to start June 2nd. Russian exporters stepped up sales in advance of this tariff. Consulting firm SovEcon pegs Russia’s 2021 wheat crop at 76.2 million tons, down 1.5 million from the last guess because of weather issues and that export tax. The USDA sees all 2021/22 U.S. wheat acreage at 45 million acres, up from 2020/21 and topping expectations, but still lower than average, even with the first anticipated increase in winter wheat acreage in 8 years. The average expected price for the next marketing year is $5.50 per bushel. Domestically, the full extent of any winterkill damage in the U.S. Plains and Midwest won’t be known until spring. Drought is also a continued concern in parts of the U.S. Plains, with the USDA’s next set of monthly state crop stories out next week. The trade is also watching overwintering weather in Ukraine and the European Union, conditions ahead of spring wheat planting in the U.S. Plains and Canada, and harvest activity in Australia. DTN says Japan bought 82,393 tons of milling wheat from the U.S., while Jordan purchased 60,000 tons of milling wheat and South Korea picked up 55,000 tons of feed wheat, both of those from unnamed origins.
