Market News

Solid rally in grains, oilseeds

Soybeans were higher on commercial and technical buying. The trade is watching the effects of wet conditions in parts of Argentina and hot, dry weather in portions of Brazil. The trade is also waiting for more public progress in talks with China ahead of Cabinet-level discussions later this month. After the close Thursday, there were rumblings the U.S. is considering lifting tariffs on China to speed up negotiations ahead of the March 1st deadline. Even if significant progress is made in negotiations, a possible slowdown in China’s economy and the spread of African Swine Fever could impact demand. Soybeans, and the other grain and oilseed commodities, were mixed to firm until about an hour before the close, when most contracts saw a solid bounce. Soybean meal and oil followed beans higher.

Corn was higher on commercial and technical buying. Corn is also watching conditions in South America, with weather in Argentina and Brazil expected to have an impact on production. Both nations are export competitors and Brazil’s second crop, the larger of the two, could be negatively affected by the issues currently impacting the soybean crop. The trade is also waiting for any updates on trade discussions with China or advancement of the USMCA. Corn also joined in Thursday’s surprising rally, with some credit given to a higher February CIF basis. South Korea has purchased an estimated 400,000 tons of corn over the past few days, with at least part of that expected to be U.S. origin. Ethanol futures were higher.

The wheat complex was higher on commercial and technical buying. U.S. wheat is competitively priced on the export market and there’s talk of new demand, including from China, but information is hard to come by because of the shutdown. The USDA’s Agricultural Outlook Forum is still scheduled for late February, but that would change if the shutdown persists. Russia has signaled it won’t slow down exports, even with sales well ahead of last year’s pace. Also, Black Sea wheat prices reportedly jumped Thursday, probably contributing to the U.S. rally. Japan bought 52,971 tons of U.S. food wheat, along with 34,650 tons from Canada and 24,340 tons from Australia. Strategie Grains pegs the European Union’s soft red wheat crop at 146.4 million tons, compared to 127 million last year.