Market News

Weather concerns in Argentina support soybeans

 

Soybeans were higher on short covering and commercial buying, along with spillover from bean meal. Meal gained for the sixth session in a row on potential crop loss in Argentina, the world’s biggest exporter of meal. After a dry weekend for much of Argentina, forecasts this week have scattered rainfall and hot temperatures in some key growing areas. Rain is slowing down early harvest activity in parts of Brazil, but yields have been good in Mato Grosso. Soybean oil was lower on commercial spread adjustments. According to wire reports, a U.S. soybean cargo was sold to China using blockchain, the system that supports bitcoin, the first known time an ag commodity trade has been conducted using that method. Weekly export inspections were up on the week and year, but remain behind last marketing year.

Corn narrowly mixed, mostly steady to fractionally lower. Corn’s also watching conditions in South America, along with weather issues slowing grain movement in parts of the Midwest. The South American spotlight is firmly on Argentina, which is the world’s third largest corn exporter. Dry conditions during the tail end of planting are expected to have at least some impact on yield. The current La Nina conditions are expected to last through summer in the southern hemisphere. The trade also has an eye out for new private U.S. acreage estimates ahead of the USDA’s outlook forum at the end of February and prospective planting numbers at the end of March. Ethanol futures were lower. U.S. corn export inspections continue to be slower than anticipated.

The wheat complex was mostly, modestly higher with Chicago and Kansas City up on short covering and commercial buying. Some winter wheat growing areas will get snow cover, but it could miss some of the drier parts of the Plains. The extent of any winterkill or drought damage wouldn’t be known until the crop emerges from dormancy. The fundamentals remain bearish, reflected again in this week’s export inspections report, even if there is some buying interest at these price levels. New supply and demand numbers are scheduled for February 8th, but the release could be affected by government funding uncertainties. Minneapolis was mixed, adjusting old crop/new crop spreads.