Market News

Soybeans, corn bounce back a little

Soybeans were modestly higher on short covering and technical buying, rallying at midday after a lower start to the session. Forecasts for South America generally look non-threatening to favorable for development and harvest. More negotiations with China are scheduled for Thursday and Friday. The deadline discussions is still March 1st, but that could be moved back. The trade is also waiting to see if the European Union actually starts scaling back or ending purchases of U.S. soybeans because of auto tariffs. Ahead of the USDA’s Ag Outlook Forum, also Thursday and Friday, analysts project 2019/20 U.S. soybean planted at 86.144 million acres, with production of 4.32 billion bushels, an average yield of 50.9 bushels per acre, and ending stocks of 893 million bushels. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying, also bouncing back after early losses. Corn is also watching weather in South America and waiting for this next round of trade talks with China. There’s been more talk of China buying U.S. corn, with the USDA reporting six weeks of shutdown delayed export sales this Friday. The numbers could either be a market mover, or have no real impact, like those delayed USDA numbers released on the 8th. U.S. sorghum, DDGS, ethanol, and pork are also potential purchase targets by Beijing. Ahead of the USDA’s Ag Outlook Forum Thursday and Friday, analysts estimate 2019/20 U.S. corn planted area at 91.512 million acres, with production of 14.882 billion bushels, an average yield of 177.1 bushels per acre, and ending stocks of 1.792 billion bushels. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. The USDA’s attaché in Turkey has 2017/18 corn production at 5.5 million tons.

The wheat complex was lower on fund and technical selling. Contracts are oversold, but export demand continues to be very slow, keeping buying interest limited. The U.S. didn’t even offer wheat in this week’s tender by Egypt, with Cairo picking up 360,000 tons of wheat from France, Romania, and Russia. The U.S. has also lost out on some other major tenders over the last couple of weeks, despite competitive prices, mostly because of freight costs. South Korea is in the market for 60,000 tons of feed wheat, while Japan is tendering for 92,830 tons of food wheat from the U.S. and/or Canada. Most forecasts have more precipitation in winter wheat growing areas this weekend. With the USDA’s Ag Outlook Forum later this week, analysts, on average, see 2019/20 U.S. wheat planted area at 47.196 million acres, with production of 1.904 billion bushels, an average yield of 47.7 bushels per acre, and ending stocks of 960 million bushels. According to reports, wheat millers in Asia are buying from Argentina instead of Australia, because of a big impact on that crop from drought. Australia has also seen increased competition in Asia in recent years from Black Sea origin wheat. The USDA attaché for Turkey has 2018/19 wheat production at 18.75 million tons, down 4% from 2017/18 on lower yields, with a winter drought in some areas and heavy rainfall in other impacting the crop.