Profit taking pulls corn, soybeans, wheat lower
Soybeans were lower on profit taking and technical selling, peeling back after establishing new highs early in the session. CONAB slashed its outlook for Brazil’s crop by 15.028 million tons to 125.471 million, with harvest underway in some areas. Production in Argentina, Paraguay, and southern Brazil has been hit hard by drought, while that early harvest activity in central and northern Brazil is being complicated by rain. CONAB’s next set of projections is out March 10th. The Rosario Grain Exchange sees Argentina’s crop at 40.5 million tons, about steady with January. Stateside, beans and corn are monitoring potential shifts in acreage ahead of widespread planting. Unknown destinations bought 299,700 tons of U.S. beans Thursday, 233,700 tons of old crop and 66,000 tons of new crop, the fifth business day in a row with a new sale. That pushes the running total to 1,805,700 tons, 734,700 tons for 2021/22 and 1.071 million tons for 2022/23, which can be linked to the declines in South American production estimates. Weekly combined old and new crop sales were nearly 2.5 million tons, with unknown destinations and China leading the way. Soybean meal was down on profit taking, while bean oil was mixed, mostly higher, adjusting spreads.
Corn was lower on profit taking and technical selling, also peeling back after hitting new highs early in the day. CONAB lowered its estimate for Brazil’s corn crop, now below the most recent USDA projection at a combined 112.343 million tons, 559,100 less than in January, but still up from 2021, on expectations for a much larger than a year ago second crop. Brazil’s second crop, planted after soybeans are harvested, is currently projected by CONAB at 86.053 million tons, 206,300 less than the prior guess, but 25.311 million more than last year, if realized. Brazil’s first crop has been hit by the same drought conditions impacting soybeans, with the new estimate from CONAB at 24.434 million tons, which is lower than both a month ago and a year ago. The Rosario Grain Exchange left its estimate for Argentina at 48 million tons. A USDA reduction for Argentina is possible in the next supply and demand report, out Wednesday, March 9th. Weekly corn export sales were down sharply on the week, with solid sales to Mexico offset by cancellations from China and unknown destinations. Ethanol futures were unchanged. Strategie Grains has the 2022/23 European Union corn crop at 69.1 million tons, up 700,000 from the previous estimate.
The wheat complex was lower on profit taking and technical selling. Tensions between Russia and Ukraine are ongoing, potentially disrupting exports out of the Black Sea. If conflict escalates and shipping slows down or halts, the most likely beneficiary is the European Union, especially France, but the U.S. could pick up part of that business. Weekly wheat export sales failed to break 85,000 tons and while they were up on the week, they were quite a bit below average. Strategie Grains sees 2022/23 soft wheat production for the European Union at 128 million tons, 300,000 more than the prior projection, with exports of 30.4 million tons, down 800,000 from January due to increased competition from the Black Sea region and South America. The U.S. Drought Monitor has expanding drought conditions in parts of the U.S. Plains. There is some rain in the near-term forecast for parts of the region, but more will be needed over a longer period of time to boost U.S. winter wheat production prospects and encourage an increase in spring wheat planted area in the U.S. and Canada. Conditions are generally better in the eastern Midwest but melting snow has pushed soil moisture levels higher in areas that already had an excess and another cold snap without adequate snow cover would cause at least some damage.