Soybeans up, corn and wheat mostly higher

Market News

Soybeans up, corn and wheat mostly higher

Soybeans were modestly higher on commercial and technical buying. Near-term forecasts have more rain in Argentina spreading into southern Brazil, but hot, dry conditions are expected to return early next month. The USDA’s next set of projections for South America is out February 9th in the supply and demand report, with the updated outlook for Brazil from CONAB scheduled for the 10th. 5% of Brazil’s harvest is complete with supplies reportedly backing up at several key ports as shippers focus on corn exports and fertilizer imports. That might be part of the reason for the recent increase in demand for U.S. beans from China. Domestically, the trade is monitoring input costs ahead of spring planting. Soybean meal was mixed on old crop/new crop bear spreading, while bean oil was up on a higher overnight move for some world vegetable oils and spillover from crude oil.

Corn was mostly higher on commercial buying and spread trade, with nearby March the only contract to finish in the red. Corn is watching conditions in South America, with more yield loss probable in some key growing areas. Recent rainfall in Argentina has been mixed, missing some of the drier portions of the growing region. The big question for Brazil will be the performance of their second crop, the largest of the three and the source of most of their exports, which is planted after the soybean harvest wraps up. A flare up in the tensions between Russia and Ukraine would impact corn export business. Both of those nations have become key U.S. competitors for corn market share. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was mostly higher on commercial support and spread activity, with Chicago and Kansas City up sharply and Minneapolis mostly firm. The big driver is that tension between Russia and Ukraine, two of the world’s biggest wheat exporters. That would mostly directly benefit exports from the European Union and could also aide U.S. sales. Drought continues to be a significant issue in parts of the U.S. Plains. The USDA’s latest round of state crops stories did show condition rating declines in many key hard red winter growing states, while soft red winter states were mixed, but with some significant improvements. The next round of state crop stories is out February 22nd, with early release for some states potentially impacted by the USDA holiday on the 21st. Demand for feed wheat from China is reportedly declining due to higher global prices and increased domestic corn production.