Soybeans, products extend rally

Market News

Soybeans, products extend rally

Soybeans were sharply higher on commercial and technical buying, with March through July closing above $14. Beans continued to follow the lead of vegetable oils, which were supported by a tight global supply and strong demand, also pushing soybean oil to new highs. The March and May contracts both ended the session above $.50 per pound. The trade is also watching conditions in Argentina and Brazil. Harvest delaying rain is expected to continue in parts of northern Brazil and while weather forecasts are mixed, Argentina and southern Brazil could see a continued net drying effect. According to reports, trading firms in Brazil are suing producers for defaulting on forward sales contracts made prior to the rally in price sparked by demand from China. There have been no new announced sales of U.S. soybeans to China, or unknown destinations, this month. The USDA’s weekly numbers are out Thursday morning. Brazilian firm ANEC projects February soybean exports at 5 million to 6.083 million tons. Soybean meal followed beans and bean oil higher.

Corn was higher on commercial and technical buying, along with spillover from soybeans. Corn is also watching South America, with more second crop corn planting delays in central and northern Brazil and dry weather for much of Argentina and southern Brazil. A wire survey projects 2020/21 Brazil’s corn crop at 108.2 million tons, even as most of that critical second crop will be planted after the optimal period, with the USDA’s next guess due March 9th. Brazilian firm ANEC estimates corn exports for February at 533,363 tons, compared to 415,282 a year ago. Stateside, widespread planting is about to get underway in parts of the Delta. The USDA’s Prospective Planting numbers are out March 31st, along with quarterly grain stocks. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 658,000 barrels a day, a drop of 253,000 on the week, the biggest single week decline on record because of the weather, and 396,000 below a year ago. Stocks of 22.785 million barrels were a decrease of 1.512 million from the week before and 1.933 million under this time last year.

The wheat complex was higher on commercial and technical buying. Paris milling wheat was up heading into the U.S. session on tight supplies in Europe. The trade is also watching the impact of Russia’s export tax and U.S. weather after potential winterkill in the Plains and Midwest, in addition to ongoing drought in much of the Plains. The trade is also monitoring overwintering conditions in the European Union, Russia, and Ukraine, weather ahead of spring wheat planting in the northern U.S. Plains and Canada, and harvest activity in Australia. The USDA’s attaché for India expects 2021/22 wheat production to hit record levels thanks to an all-time high in planted area and favorable weather. Consulting firm APK-Inform says that as of February 1st, Ukraine’s grain stocks were 18.2 million tons, including 5.1 million tons of wheat, down 3.5 million on the year. DTN says the Philippines is tendering for 145,000 tons of wheat.

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