Soybeans, corn, wheat up on crop weather, supply concerns
Soybeans were sharply higher on commercial and technical buying, establishing more fresh contract highs, but with March failing to break $16. The USDA lowered South American production estimates, for Argentina, Brazil, and Paraguay, with more reductions possible next month as dry conditions persist in many key growing areas. There is a chance for some rain this weekend, but coverage is expected to be scattered. In contrast, parts of central and northern Brazil are seeing rain-related harvest days, impacting quality. USDA also cut imports by China to 97 million tons. U.S. soybean ending stocks were down on a higher crush use projection, likely because of that lower production guess for Argentina, the world’s biggest exporter of soybean products. Soybean meal and oil were supported by commercial demand. The USDA reported the sale of 240,000 tons of 2022/23 U.S. soybeans to China. That’s the fourth business day in a row with an announced sale for a running total of 1.506 million tons, 1.005 million of that new crop, all to either China or unknown destinations. The USDA’s weekly sales numbers are out Thursday at 8:30 AM Eastern/7:30 Central.
Corn was higher on commercial and technical buying, hitting new contract highs. The USDA lowered Brazil’s corn outlook slightly, down 1 million tons at 114 million, but left Argentina unchanged, for now. The big question for corn in South America is the performance of Brazil’s second crop, which is planted after soybeans are harvested. CONAB’s new estimates for Brazil are out this Thursday. U.S. corn ending stocks were unchanged from January, with no adjustments to the balance sheet, and the next set of supply and demand numbers out March 9th. The trade is also keeping an eye on U.S. acreage signals, with the prospective planting report due at the end of March. The U.S. Energy Information Administration says ethanol production last week averaged 994,000 barrels a day, down 47,000 on the week due to tighter margins and weather issues in some areas, but still up 57,000 on the year. The supply was reported at 24.799 million tons, 1.055 million less than the previous week’s near two-year high, but 1.003 million more than this time last year. Ethanol futures were unchanged.
The wheat complex was higher on fund and technical buying. The focuses of the market continue to be the tensions in the Black Sea region and weather in the U.S. Plains. No major advancements have been reported in talks between Russia and Ukraine, both major wheat exporters. The USDA left Russia’s export projection unchanged, while lowering the outlook for Ukraine slightly. Stateside, while there has been some precipitation in the U.S. Plains and there are more near-term possibilities, the overall outlook for the region remains dry, impacting winter wheat quality and potentially lowering spring wheat planted area in the U.S. and Canada. In the eastern Midwest, the recent snow is starting to melt in many areas, pushing soil moisture levels higher, when parts of the region were already reporting an excess. U.S. wheat ending stocks were up on lower food, seed, and export demand, while world production and stocks were down.