Market News

Poor crop ratings in Argentina support soybeans, corn

 

Soybeans were higher on commercial and technical buying. The trade continues to monitor the generally dry conditions in parts of Argentina, expecting at least some loss of production on top of what USDA already projects. The Buenos Aires Grain Exchange says 56% of Argentina’s beans are in poor to very poor condition. Conditions in Brazil are mixed, but generally considered to be favorable, overall. Weekly export numbers were neutral and domestic farmer selling has increased in some areas after the recent futures rally. China’s Lunar New Year celebrations start Friday, which is expected to have an impact on trade. Soybean meal was higher and bean oil was lower, adjusting product spreads. Argentina is also a leading exporter of meal. The National Oilseed Processors Association says member firms crushed 163.111 million bushels of soybeans in January, below the average estimate of 165.511 million.

Corn was modestly higher on commercial and technical buying. Corn’s also watching South America, with more potential yield loss in Argentina and slow second crop planting in parts of Brazil. According to the Buenos Aires Grain Exchange, nearly 57% of Argentina’s corn crop is in poor to very poor shape. The trade also has an eye on U.S. conditions ahead of planting, especially dry parts of the Plains and Midwest, with the USDA’s Ag Outlook Forum starting February 22nd. The next set of supply and demand numbers are due March 8th and the official prospective planting report will be out at the end of that month. Weekly export sales were strong, but the overall pace for this marketing year remains slow. Ethanol futures were higher.

The wheat complex was higher on commercial and technical buying. Soil moisture has improved in parts of the Plains, but other areas remain in a drought. Updated monthly USDA condition ratings are out on the 27th, with ratings in most states expected to decline again. Some wheat growing areas of the eastern Midwest, in contrast, are too wet, with more precipitation in the forecast. Minneapolis will continue to monitor conditions in the northern U.S. Plains and Canada ahead of spring planting. Also, parts of Russia’s wheat growing areas have lighter than normal snow cover, potentially damaging their crop. Weekly export numbers were bearish. The last quarter of the 2017/18 marketing year for wheat starts March 1st. Japan bought 60,463 tons of U.S. food wheat, along with 24,220 tons from Canada. Jordan is tendering for 100,000 tons of optional origin milling wheat.