Market News

Minneapolis wheat up on planting concerns

Soybeans were mixed on old crop/new crop spread adjustments. The delayed export numbers were a little disappointing, with lower than expected sales to China. This round of trade negotiations with China has had indications of at least some progress between the world’s two largest economies, with the Chinese delegation staying through the weekend. Late Friday, Secretary Sonny Perdue announced China had committed to buying another 10 million tons of U.S. soybeans. The USDA’s Ag Outlook Forum projects 2019/20 soybean production at 4.175 billion bushels, with an average yield of 49.5 bushels per acre and ending stocks of 845 million bushels. The stocks to usage ratio on beans is seen at 19.8% and the average farm price is estimated at $8.80 per bushel. Updated 2018/19 numbers are out March 8th. Soybean meal was weak and bean oil was firm on the adjustment of product spreads. The USDA’s attaché in Brazil has soybean production at 115.5 million tons, less than the current official guess and below AgroConsult’s new projection of 116.4 million tons. The Buenos Aires Grain Exchange estimates Argentina’s bean crop at 53 million tons, with 87% of the crop rated as “favorable”. The USDA says the domestic soybean crush during December was 184 million bushels, up 6 million from November and 8 million from December 2017.

Corn was narrowly mixed in consolidation trade. The delayed corn exports were neutral and the trade is waiting to see if China will start buying U.S. corn, as has been rumored for a few weeks. China didn’t show up in that export report, but the overall 2018/19 sales remain on pace to meet or exceed USDA projects for the marketing year. U.S. DDGS, ethanol, and sorghum are also potentially purchase targets for Beijing. The USDA is projecting a bigger corn crop this year, against smaller soybean and wheat crops. For 2019/20, at the Ag Outlook Forum, production is pegged at 14.89 billion bushels, with an average yield of 176.0 bushels per acre and ending stocks of 1.65 billion bushels. The average farm price is pegged at $3.65 per bushel, with a stocks to usage ratio of 11.0%. Ethanol futures were higher. The industry is still waiting for year-round E15 details. The USDA says corn for fuel alcohol use during December was 461 million bushels, up 1% on the month, but down 6% on the year, while DDG production was 1.93 million tons, a slight decrease from the month before and 2% less than the year prior.

The wheat complex was mixed, mostly firm. Minneapolis was higher, supported by probable spring planting delays, while Chicago was mixed on spread adjustments and Kansas City was firm on an oversold bounce. China didn’t show up in the delayed wheat sales, contrary to some trade rumors, and the export numbers look neutral, with the current marketing year more than halfway complete. For 2019/20, the USDA’s Ag Outlook Forum estimated wheat production at 1.902 billion bushels, with an average yield of 47.8 bushels per acre and ending stocks of 944 million bushels. Wheat’s stocks to usage ratio is seen at 44.8% with an average farm price of $5.20 per bushel. New 2018/19 supply and demand estimates are out March 8th, with prospecting planting numbers due March 29th.