Wheat shoots higher on Black Sea concerns

Market News

Wheat shoots higher on Black Sea concerns

Soybeans were higher on commercial and technical buying, capping off a week of solid gains. Near-term forecasts were generally hot and dry for Argentina and southern Brazil, while portions of northern and central Brazil have recently received harvest delaying and quality harming rain. The declining production projections for South America have helped spark an increase in export demand for U.S. soybeans. China bought 108,000 tons of new crop U.S. beans, the sixth business day in a row with an announced sale. That brought the running total to 1,913,700 tons, with 1,179,000 of that new crop, and all the sales have been to either China or unknown destinations, which will probably turn out to be China. The USDA’s next set of supply and demand numbers is out March 9th and CONAB’s updated outlook for Brazil’s crops is scheduled for the 10th. Soybean meal and oil were supported by commercial buying. Oil picked up additional interest from a sharply higher move in crude oil and the sale of 30,000 tons of 2021/22 U.S. bean oil to unknown destinations. That sale was initially announced as for 2022/23 delivery.

Corn was higher on commercial and technical buying, rebounding from Thursday and adding to the week’s strength. Corn was also watching conditions in South America, expecting further declines in yield and quality, while Japan picked up 128,000 tons of old crop U.S. corn ahead of the open. For South America, the trade is watching Brazil’s soybean harvest closely as their critical second crop is planted after beans. In Argentina, the Buenos Aires Grain Exchange says 28% of corn is in good to excellent condition, unchanged on the week. There’s been more talk, but no confirmation, of China buying U.S. corn. The trade is monitoring signals on U.S. acreage ahead of widespread planting, with the USDA’s prospective planting report out March 31st. Ethanol futures were unchanged.

The wheat complex was sharply higher on commercial and technical buying, with the most active months at the three U.S. pits posting solid week-to-week gains. Tensions between Russia and Ukraine continued to simmer, potentially disrupting exports. Towards the end of the session, contracts moved from mixed to solidly higher, with the possibility of outright conflict in the region in the near future. The situation remains extremely volatile. Russian ag consulting firm IKAR estimated Russia’s 2022 wheat crop at 82.5 million tons, with 2021/22 exports at 46 million tons. Moscow’s floating export tariff has had an impact on sales, with a cap scheduled to go in place on the 15th. Near-term weather forecasts for the U.S. Plains were mixed, with rain in some areas against dry weather in others. That’s impacting winter wheat quality and could limit spring wheat acreage in parts of the U.S. and Canada. For the eastern Midwest, snow is melting in southern areas, adding to excess soil moisture levels, and if there’s another cold snap with little to no snow cover, it could cause winterkill.