Soybeans eke out gains as corn, wheat sell off

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Soybeans eke out gains as corn, wheat sell off

Soybeans were modestly higher on commercial and technical buying. Export sales were down on the week but have almost reached the USDA target for the marketing year. The leading buyers were China and Indonesia for old crop and China and unknown destinations for new crop. Purchase of U.S. beans by China during March were down sharply on the year and there are concerns about sustained demand from the world’s biggest buyer, partially due to poor crush margins.  That’s in addition to an expectation for increased domestic planted area in China. ABIOVE estimates Brazil’s 2022 soybean crop at 125.3 million tons, unchanged from the previous projection, with exports at 77.2 million tons and a domestic crush of 48 million tons. The Rosario Grain Exchange has Argentina’s soybean crop at 41.2 million tons, 1.2 million more than the last estimate, but 4 million under earlier projections. Beans are also continuing to monitor the U.S. planting pace, along with product prices and the energy markets. Soybean meal was mixed, adjusting spreads, while bean oil was up on strong global vegetable oil demand, solid domestic crush margins, and a higher move in crude oil.

Corn was lower on profit taking and technical selling, along with spillover from wheat. While more near-term planting delays are likely, most forecasts have warmer, drier weather in many areas next week, which should help the pace pick up steam. Export numbers on corn were bearish, sales and shipments, but the supply outlook is bullish. China was far and away the leading buyer for both old and new crop U.S. corn, likely due to the current constraints on Ukraine’s exports following the invasion by Russia and subsequent damage to Black Sea port infrastructure. Refinitiv estimates China’s 2022/23 domestic corn production at a record 276 million tons. Brazil’s second corn crop is a question mark, with increasing concerns about drought impact in central Brazil, a key growing area. The Rosario Grain Exchange has Argentina’s corn crop at 49.2 million tons, up 1.5 million from the prior guess, but well below initial expectations.

The wheat complex was sharply lower on fund and technical selling. Export sales were a marketing year low, with U.S. wheat priced above major competitors, cancelling out some concerns about U.S. weather. Large portions of the hard red winter region remain locked in drought conditions, while many soft red winter areas are too wet. Further north, spring wheat planting is being delayed by cold, wet conditions in parts of that growing region. That helped Minneapolis to the occasional gain but wasn’t enough to keep the pit in positive territory. The big weekly buyers for U.S. wheat last week were Mexico for old crop and Nigeria for new crop. Nigeria did cancel a substantial amount of old crop U.S. wheat. The trade continues to monitor the export and planting impacts on Ukraine from Russia’s invasion. Ukraine’s Ag Ministry says 20% of spring crops have been planted, but acreage is expected to be substantially smaller than a year ago. The USDA’s attaché has 2022/23 wheat production for Kazakhstan at 11.8 million tons, compared to 11.814 million in 2021/22. SovEcon sees Russia’s crop at a record large 87.4 million tons. Exports are expected to be 7 million tons, which would be unchanged from the previous marketing year. The Buenos Aires Grain Exchange has slightly lowered its outlook for Argentina’s 2022/23 wheat planted area.