Market News

Corn sees oversold bounce

Soybeans were steady to firm on commercial spread trade. Contracts were up early, but had an up and down session, even with more potential crop damage in South America. Private firms Celeres now pegs Brazil at 117.2 million tons and Agroconsult has the crop at 117.6 million tons. The trade is also waiting for any signs of public progress in trade talks with China with Cabinet-level discussions expected at the end of the month and the March 1st deadline for a deal looming. China’s purchases of Brazilian beans have slowed down with concerns about quality and yield. Signs of an economic slowdown in China and the continued spread of African Swine Fever are probably also contributing to the decline in purchases. Soybean meal was firm and bean oil was weak on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying. Corn took back some of the recent losses, with very wet conditions in parts of Argentina and mostly hot, dry weather in parts of Brazil. Ethanol production was up on the week and stocks were modestly higher. The U.S. Energy Information Administration says production averaged 1.051 million barrels a day, up 51,000 on the week, while stocks were 97,000 barrels higher at 23.351 million. Ethanol futures were lower. The industry is monitoring margins, while waiting for more details on year-round E15 use and potential export demand from China. Beijing could also purchase U.S. corn, DDGS, and sorghum. China’s Ag Ministry says it will sell off its supply of “aging” corn by the end of the year. Ukraine’s Ag Ministry says 2018/19 corn exports are nearly 11 million tons, compared to 6.6 million this time last year. South Korea has reportedly purchased corn, some it from the U.S. Weekly export inspections are delayed until Tuesday.

The wheat complex was steady to modestly higher on short covering and technical buying. Prices are competitive on the export market, but the shutdown is delaying any official announcements of large sales and freight rates limit some of that competitiveness. There’s a chance for winterkill in some areas starting later this week. Most winter wheat growing areas have adequate snow cover, but temperatures in parts of the region are expected to be bitterly cold. According to Ukraine’s Ag Ministry, wheat exports this marketing year are 11.1 million tons, compared to 11.6 million a year ago. Russia’s Ag Ministry says it is not discussing limiting wheat exports. South Korea bought 65,000 tons of feed wheat and Japan picked up 6,000 tons, both from unknown origins, while Jordan bought 60,000 tons of optional origin wheat. Japan is tendering for U.S. food wheat, along with supplies from Australia and Canada.