Market News
Nearby wheat continues higher move
Soybeans were sharply lower on profit taking and technical selling, giving back a small part of the gains from earlier in the week. Most near-term forecasts have rain in dry parts of Argentina and southern Brazil, but it’s too late for some of the crop, which has boosted U.S. exports. AgRural says 44% of Brazil’s soybean crop has been harvested. Unknown destinations and China both bought old and new crop U.S. beans, the fourth business day in a row with an announced sale. Unknown picked up 264,000 tons, 198,000 tons for 2021/22 and 66,000 tons for 2022/23, and China purchased 266,000 tons, 198,000 tons old crop and 68,000 tons new crop. That brings the running total to 1,669,000 tons, with 994,000 tons of that new crop. Those sales reported as heading to an unknown destination could be switched to China when its time for delivery. Soybean meal was down on profit taking, while bean oil was mostly lower on spread trade and profit taking. Bean oil ignored a sharply higher move in crude oil and world vegetable oils, which have surged due to the roles played by Russia and Ukraine in global trade of energies and vegetable oils. Deliveries on March contracts continue to be relatively light, especially for beans and meal.
Corn was weak to lower on profit taking and technical selling, with nearby contracts unable to follow through on overnight and early gains. Contracts were overbought and it remains to be seen how long Black Sea exports will be affected by Russia’s invasion of Ukraine. Russia is reportedly facing stiffer than expected resistance in parts of Ukraine and a military caravan headed to Kyiv is being slowed down by supply chain issues. Basis levels at the Gulf and Pacific Northwest have moved higher, a sign of likely export interest in U.S. corn. There’s talk that it’s China, which has a significant amount of unshipped corn from Ukraine, but no confirmation. The trade is also monitoring conditions ahead of widespread U.S. planting and second crop corn planting in Brazil. AgRural says 64% of that critical crop is planted in central and southern growing areas. The USDA’s next set of supply, demand, and production numbers is out on the 9th, with CONAB’s updated outlook for Brazil on the 10th. The U.S. Energy Information Administration says ethanol production last week averaged 997,000 barrels a day, down 27,000 on the week, but up 148,000 on the year, with a supply of 24.933 million barrels, a decrease of 574,000 from the previous week, but an increase of 2.508 million from a year ago. Ethanol futures were unchanged. There have been no reported deliveries on the March corn contract.
The wheat complex was widely mixed, with an expanded trading limit gain of $.75 for May Chicago and a more than $1 daily range in May Minneapolis. Wheat engaged in aggressive bull spreading, while continuing to monitor the Black Sea, with Ukrainian ports closed, some damage has been reported, and sanctions stunting Russia’s ability to do business. The European Union is expected to pick up part of the slack with a lesser amount headed to the U.S. and it looks like India will step up sales to also help full some of the void. Russia and Ukraine combine for about a third of the world’s wheat sales. The Russian invasion is also expected to impact spring wheat planting, especially in Ukraine. The trade is also watching weather in the U.S. Plains. There’s a near-term chance for precipitation in some southern and southwestern areas, but longer-term outlooks are less certain, with much of the region in drought or near drought conditions. That’s not only impacting winter wheat but could limit spring wheat planted area in the northern and northwestern U.S. Plains, along with the Canadian Prairies. Deliveries in March Chicago are relatively heavy and much lighter for March Kansas City, with no deliveries against March Minneapolis.