Soybeans pulled higher by bean oil

Market News

Soybeans pulled higher by bean oil

Soybeans ended the session modestly higher on commercial and technical buying. There was also spillover from bean oil, supported by commercial buying and strength in palm oil, while traders continue to watch weather in South America. Near-term forecasts have more generally hot, dry weather in Argentina and southern Brazil, limiting production potential. There are also issues with harvest delays in northern Brazil. Ahead of the open, unknown destinations bought 132,000 tons of 2022/23 U.S. soybeans. That could be an early sign of Chinese nervousness about yields in Brazil. The USDA’s weekly U.S. sales numbers are out Thursday morning. Brazilian export firm ANEC says Brazil’s 2021 soybeans exports were 86.63 million tons, including almost 60 million tons to China, compared to 82.3 million tons in 2020. Soybean meal was pressured by profit taking and the adjustment of product spreads. The USDA’s attaché for Malaysia estimates 2021/22 crude palm oil production at 18 million tons, down 200,000 from the previous projection, with exports at 16.3 million tons, compared to the official guess of 17.22 million and the 2020/21 total of 15.9 million tons.

Corn was modestly lower on profit taking and technical selling. Corn is also watching South America, with some private firms already lowering crop outlooks because of La Nina. The big question is what will happen with Brazil’s critical second crop, the larger of the three and source of most of their exports. That crop is planted after soybeans are harvested and was hit hard last year by drier than normal conditions. CONAB’s new estimate for Brazil is out on the 11th, with an updated USDA projection on the 12th. The USDA’s final 2021 U.S. corn and soybean production totals are also out next Wednesday. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 1.048 million barrels a day, down 11,000 on the week, but up 113,000 on the year, while stocks hit a more than 20-week high at 21.359 million barrels, an increase of 683,000 from the previous week, but a decrease of 1.925 million from a year ago.

The wheat complex was lower on profit taking and technical selling. Drought continues to be an issue for much of the U.S. hard red winter crop, with excessive moisture a concern for portions of the soft red winter region. The USDA’s winter wheat planted area figures are out on the 12th. Parts of the northwestern U.S. Plains have recently received precipitation, but more will be needed in that region ahead of spring wheat planting. That also includes portions of the Canadian Prairies. U.S. export demand is slower than expected, even with Russia’s ever-increasing export tariff and Moscow’s impending cap on sales. The trade is also monitoring political tensions between Russia and Ukraine, in addition to overwintering weather in the Black Sea region. Wheat harvest is ongoing in Argentina and Australia, with many expecting the USDA to raise their projections in the next round of supply and demand numbers.