Market News

Soybeans up on concerns about Argentina, but under day’s highs

 

Soybeans were modestly higher on commercial and speculative buying, but closing well below the session’s highs. Weekend rainfall totals were lower than expected in Argentina, with more dry weather in the forecast this week. Temperatures, however, are not expected to be as hot and conditions in most of Brazil remain generally favorable. AgRural has 17% of Brazil’s soybean crop harvested as of last Friday, compared to 26% a year ago. Safras e Mercado projects Brazil’s current crop at 115.6 million tons, which, if realized, would be a new record. Soybean meal was higher on those concerns about Argentina, but as gains there died back, so did the gains in beans, and for that matter, corn. Bean oil was up on the positive tone in the soy complex. Argentina crushes more than 80% of its domestic production and is the leading exporter of soybean meal.

Corn was modestly lower on profit taking and technical selling, backing off after March hit a new four month high. Corn’s also watching South America, with probable yield loss in Argentina leading to a bigger USDA export estimate. Second crop planting in Brazil is expected to pick up steam in some areas after widespread rain delays. Argentina and Brazil are both U.S. corn export competitors, and according to Allendale, corn, and soy product, shipments out of Brazil’s newer northern ports are up 80% from this time last year. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are pushed back until Thursday, with weekly export sales now out Friday, delayed by Presidents’ Day.

The wheat complex was modestly lower on fund and technical selling, in addition to the higher dollar. Chicago, Kansas City, and Minneapolis all have weather concerns, but bullish news runs its course quickly for wheat and that initial support Tuesday died out quickly. Chicago is watching potential flooding in the eastern Midwest, Kansas City has an eye on forecasted precipitation in the southern Plains, and Minneapolis is watching conditions in the northern Plains and Canada ahead of spring wheat planting. The overall fundamental outlook, globally and domestically, remains bearish. Still, about half of the USDA’s reported global wheat stocks are owned by China and not available for trade. Iraq bought 50,000 tons of milling wheat each from the U.S., Australia, and Canada. Algeria is tendering for an unspecified amount of optional origin milling wheat.