Soybeans, corn, wheat see week-to-week gains
Soybeans were higher on commercial and technical buying, with contracts posting a week-to-week gain. The USDA’s Ag Outlook Forum shows tight soybean supplies next marketing year, even as production rises. With planted area at 90 million acres, the USDA is using a yield of 50.8 bushels per acre, 2021 U.S. production is seen at a record 4.525 billion bushels, with ending stocks of 145 million bushels and a stocks to usage ratio of 3.2%. The USDA does expect slower export demand next marketing year, with China likely focused on record production in Brazil, but with stronger domestic crush use. The average farm price is estimated at $11.25 per bushel. The trade is also continuing to watch weather issues in Argentina and Brazil. Near-term, parts of Brazil will see more harvest delaying rain, while other areas of Brazil and parts of Argentina are expected to see a drier pattern. Datagro says 9.1% of Brazil’s soybean crop is harvested, compared to 21.4% a year ago and 19.7% on average. Still, Brazil’s basis has moved lower as harvest has gone on, cutting into the U.S. market share. Weekly export sales were within pre-report expectations, while shipments remain ahead of the pace needed to meet USDA projections for the current marketing year. Soybean meal was mixed on old crop/new crop spread adjustments, while bean oil was supported by strong global vegetable oil demand.
Corn was mixed on old crop/new crop spread adjustments, but still ending the week higher. The USDA sees a slight year to year increase for corn ending stocks on continued solid demand against a record crop. The USDA has planted area at 92 million acres and is using a yield of 179.5 bushels per acre, for production of 15.15 billion bushels and ending stocks of 1.552 billion. Total use is expected to increase by 3% on higher use for most sectors, including ethanol, feed, and exports, with stocks to usage holding just about steady. The average 2021/22 farm price is estimated at $4.20 per bushel. The USDA’s next set of supply and demand estimates is out March 9th, while the survey-based planting projections are due March 31st, along with quarterly grain stocks. New crop corn hit new highs on those demand expectations and that spread trade. Export sales were down on the week, but within expectations, featuring a cancellation by unknown destinations. Corn is also watching South America, with a slow second crop planting pace for corn in Brazil and concerns about yield in Argentina. Ethanol futures were unchanged. The CME Group is raising speculative trading limits for corn, soybeans, soybean products, and wheat, which could contribute to more volatility.
The wheat complex was lower on profit taking and technical selling, while still managing a higher weekly finish. The USDA is projecting a tighter U.S. wheat supply next marketing year, mostly because of lower beginning stocks, but the total could still be the lowest in several years. The USDA has planted area for all types of wheat at 45 million acres, with a yield of 49.1 bushels per acre and production of 1.827 billion bushels. The USDA is anticipating a cut in exports, but also predicts a rise in feed wheat usage. The average farm price is estimated at $5.50 per bushel. Winter wheat acreage is expected to increase for the first time in eight years, while spring wheat could lose ground to soybeans and corn. Some winterkill damage is likely in the Midwest and Plains but the extent won’t be fully known until spring. The USDA’s monthly state crop condition and weather updates are out next week, while the weekly national and state reports resume in April. The trade is also watching overwintering weather in the European Union, Russia, and Ukraine, conditions ahead of spring wheat planting in the U.S. and Canada, and harvest activity in Australia. Weekly export sales were bearish, closing in on the final quarter of the 2020/21 U.S. marketing year. DTN says South Korea bought 65,000 tons of optional origin feed wheat, while Tunisia is tendering for 100,000 tons of soft wheat and 92,000 tons of durum.