Wheat up, corn, soybeans mixed ahead of USDA numbers
Soybeans were mixed, with old crop up modestly and new crop down. CONAB lowered its outlook for Brazil by 1.6% to 140.5 million tons, still record large and more than what some were expecting, with a new USDA guess out Wednesday in the monthly supply and demand update. Production in Argentina is also being impacted by hot, dry weather, with the USDA’s attaché pegging production at 46.5 million tons. Ahead of those numbers Wednesday, analysts expect the USDA to lower outlooks for South America, with increases for domestic and quarterly stocks against a reduction for the world supply. The preliminary 2021 U.S. production total is expected to be 4.435 billion bushels, up slightly from the last guess. Those reports are all out at Noon Eastern/11 Central. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Tuesday morning, the USDA reported the sale of 100,000 tons of 2021/22 U.S. soybeans to Mexico.
Corn was mixed, mostly firm. CONAB reduced its outlook for Brazil’s first corn crop by 14.7% to 24.787 million tons, leaving the projections for the second and third crops unchanged for now at 86.259 million and 1.856 million tons, respectively. That second crop is planted after Brazil’s soybean crop is harvested. The USDA is expected to lower South American production Wednesday, but bigger chances might wait until February or March. Quarterly U.S. stocks are expected to be above a year ago, against slight reductions for domestic and world ending stocks. The average guess for the 2021 U.S. crop is 15.069 billion bushels, a little bit more than the previous projection. Export demand is routine and while ethanol margins are good, they have tightened. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are also out Wednesday. Ethanol futures were unchanged. Part of that export weakness is China focusing on importing corn from Ukraine instead of the U.S.
The wheat complex was higher on short covering and technical buying. Contracts were oversold after the recent drop, with drought a continued concern in parts of the Plains. That’s primarily in the southern U.S. Plains, but also extends into portions of the northern and northwestern parts of the region. The issue for sections of the eastern Midwest is excessive soil moisture. U.S. winter wheat planted area numbers are also out Wednesday. The trade is also monitoring overwintering conditions in Europe and the Black Sea region, along with political tensions between Russia and Ukraine and harvest activity in Argentina and Australia. The USDA could raise production outlooks for those two nations Wednesday and increase global ending stocks, while lowering expectations for U.S. ending and quarterly stocks. U.S. winter wheat planted area will likely be above a year ago, with the average estimate at 34.1 million acres, compared to 33.6 million a year ago, largely due to an anticipated rise in hard red winter. CONAB has Brazil’s wheat crop at 7.679 million tons, 1.7% under December, but 23.2% above 2021.