Market News

Corn up on new USDA numbers

 

Soybeans were narrowly mixed on spread adjustments. The USDA’s new U.S. ending stocks estimate was above the average guess because of a projected slowdown in export demand. The production estimate for Argentina was down sharply on the month, while Brazil was up slightly. CONAB’s estimate for Brazil is just above the USDA at 113.02 million tons. Soybean meal was mostly weak, also adjusting spreads, and bean oil was pressured by higher U.S. ending stocks. Weekly export sales for beans and products were solid, but soybean shipments remain slow. USDA left China’s soybean import estimate at 97 million tons.

Corn was higher on commercial and technical buying. U.S. ending stocks were down more than expected on increased feed, fuel, and export projections. The USDA lowered production outlooks for both Argentina and Brazil, on drought and second crop planting delays, respectively. CONAB has Brazil’s first crop at 25.12 million tons, down 17.5% on the year, and says the second crop could be as much as 7.8% below a year ago, with total production of 87.2 million tons. The trade is also watching U.S. weather ahead of widespread planting, with the USDA’s prospective planting report out at the end of the month. Ethanol futures were weak. Japan bought 110,000 tons of 2017/18 U.S. corn. Weekly sales were strong and the overall pace has improved quite a bit, but this year’s shipments are still well behind last year.

The wheat complex was mixed, with Chicago and Minneapolis up and Kansas City down. The USDA lowered the U.S. export outlook, while raising domestic and global ending stocks. Drought or near drought conditions are expected to persist in much of the U.S. Plains, but recent precipitation has helped in some areas. Excessive soil moisture could be an issue for winter wheat in the eastern Midwest. Minneapolis is watching conditions in the northern U.S. Plains and Canada ahead of spring wheat planting. South Korea bought 65,000 tons of optional origin feed wheat. Weekly export numbers for wheat were bearish, with a quarter left in the 2017/18 marketing year.