Soybeans, corn follow crude oil lower
Soybeans were lower on fund and technical selling, with most contracts posting double digit losses. Beans followed crude oil, which pulled back on signs of easing tensions in the Black Sea region. While wheat has caught a lot of the headlines, the energy market would also be drastically impacted by conflict between Russia and Ukraine. Near-term forecasts do have some scattered rain in parts of Argentina and southern Brazil. The USDA’s attaché in Brazil cut its outlook to 134.5 million tons, compared to the most recent official guess of 134 million and CONAB’s current outlook of 125.471 million tons. Further yield reductions are likely as harvest advances. A few private firms are below 124 million tons. The attaché has 2021/22 exports at 86.8 million tons, compared to a record 88.9 million in 2020/21. The crush this marketing year is seen at 46.6 million tons, compared to 46.5 million last marketing year. China reportedly recently breached contracts on more than five cargoes of beans from Brazil due to domestic crush margins. The NOPA’s member soybean crush for January was 182.216 million bushels, below pre-report estimates. Mexico bought 101,000 tons of U.S. soybeans, with 53,500 tons for 2021/22 delivery and 47,500 tons for 2022/23. Soybean meal fell on the losses in soybeans and corn, along with the recent rain in Argentina, the world’s biggest exporter of soybean products. Bean oil was mixed on bear spreading.
Corn was lower on fund and technical selling, with old crop months down sharply. Corn also followed the lead of crude oil and watching conditions in South America. Brazil’s soybean harvest is faster than average, which is allowing for speedy planting of the second corn crop. Brazil’s second crop is the largest of the three and the source of most of their exports. The USDA’s next round of production projections is out March 9th, with CONAB’s updated outlook for Brazil slated for March 10th. The potential conflict between Russia and Ukraine has also been a supportive factor for corn, as both nations have played an increasing role in that export market. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Ethanol futures were unchanged.
The wheat complex was sharply lower on fund and technical selling. While nothing was made official during the regular session, Russia was reportedly moving some troops away from the border with Ukraine. Still, the situation is not resolved and remains volatile, potentially drastically impacting movement out of the Black Sea region, which would hit wheat and energies hard. Ukraine’s wheat exports have been trending well ahead of last marketing year, but again, that would change if there were conflict in the region. SovEcon estimates Russia’s wheat crop at 84.8 million tons, up 3.6 million from the last guess, citing weather. This week’s precipitation is expected to favor the eastern Midwest over the Plains. The Plains will see some rain and snow, but it’s expected to be limited to eastern areas, further stressing winter wheat, and likely having some impact on spring wheat acreage in the U.S. and Canada. Portions of the eastern Midwest could use that snow and rain, but some areas do have excess soil moisture.