Strength in soybeans, wheat pulls corn higher
Soybeans were sharply higher on commercial and technical buying, with March closing just shy of the 2021 spot price high. Beans roared to new highs with strength in bean meal, with March establishing a fresh closing high, and China buying 132,000 tons of 2022/23 U.S. beans. That is the sixth day in a row with an announced purchase of U.S. soybeans for a running total of 815,000 tons, including 575,500 tons of new crop. Most of those sales have been to either China or unknown destinations. The USDA’s weekly sales numbers are out Friday morning, delayed by Monday’s holiday. The trade is also watching weather and harvest activity in South America, expecting further yield reductions in some areas. Still, Datagro did buck the trend, raising its outlook for Brazil to 130.25 million tons, an increase of only 250,000 tons, but an increase when many other projections are moving lower. ADM says it moved a record large single vessel soybean shipment out of a northern Brazil port. The Buenos Aires Grain Exchange says farmers have sold 39.2 million tons of 2020/21 soybeans, out of a total volume of 43.1 million. Soybean meal and oil were both supported by commercial buying, watching South America, global vegetable oils, feed demand factors, and the Black Sea region.
Corn was higher on commercial and technical buying, with March moving to a near ten-year high. Contracts were mixed early, but rallied as beans, bean meal, and wheat made new highs for the session. Rain is in the forecast for parts of Argentina and southern Brazil, but some damage has definitely been done. The spotlight for South America now falls on Brazil’s second crop, the largest of the three and source of most of their exports, with planting ahead of average. Similar to its outlook for soybeans, Datagro raised its projection for Brazil’s corn crop, now at 117.82 million tons, compared to their last guess of 115.22 million, on expectations for a strong second crop. The USDA’s next round of projections is out March 9th, with CONAB’s updated outlook for Brazil due March 10th. The situation in the Black Sea region is also supportive for corn. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday, delayed by Monday’s holiday. The USDA’s Ag Outlook Forum is later Thursday and Friday, with acreage projections starting Thursday.
The wheat complex was sharply higher on commercial and technical buying, with a contract high in March Kansas City and a close above $10 for March Minneapolis. The complex is watching the tensions in the Black Sea region and the potential impact on exports. Both Russia and Ukraine are major wheat exporters and while there have been no reported disruptions out of the Black Sea, some vessels are said to be hesitant to enter that body of water and an escalation of tensions would also slow out movement. There’s also been reports of Russian hacking of Ukraine’s financial infrastructure. Drought is a problem in much of the U.S. Plains, while parts of the eastern Midwest are excessively wet, both potentially lower yield to some extent. The drought or near drought conditions covering much of the U.S. Plains will also likely impact spring wheat planted acreage in northern and northwestern areas, into the Canadian Prairies. The USDA’s prospective planting numbers are out March 31st.