Market News

Soybeans, corn supported by tight supplies

Soybeans were higher on commercial and technical buying, padding the weekly gains. World vegetable oil prices either made new highs or came close to them ahead of the U.S. session. Additionally, U.S. and world supplies remain tight, with new supply and demand numbers out on the 9th. Harvest remains slow in Brazil and while parts of Argentina could see rain over the next week, totals and coverage are uncertain. Brazil could still be on pace for a record crop and some spots in Argentina have seen improvements in condition, but South American soybeans are not out of the woods quite yet. The trade is also waiting for widespread U.S. planting to get underway, keeping an eye out for any acreage adjustments. The USDA’s survey-based prospective planting numbers are out on the 31^st, along with quarterly stocks data. Soybean oil was supported by global vegetable oil prices, while meal was up, following the lead of beans and oil.

Corn was higher on commercial and technical buying, finishing the week mostly higher. Demand for U.S. corn has slowed down with exports at marketing year lows for two consecutive weeks, but the supply remains tight. Corn is also watching conditions in South America. The second crop corn planting pace in Brazil continues to be slow because of the soybean harvest delays, while Argentina has likely lost some yield potential. Stateside, the trade is monitoring conditions ahead of widespread planting, with early delays in parts of the Delta and the south. Ethanol futures were unchanged. The Renewable Fuels Association says ethanol exports for January 2021 were the largest for any January on record at 164.6 million gallons, a jump of 48% from December 2020. DDGS exports were 916,451 tons, an increase of 9% on the month.

The wheat complex was modestly higher on short covering and technical buying, with May contracts down for the week in Chicago and Kansas City and May Minneapolis modestly higher. Rain is in the forecast for parts of the central and southern U.S. Plains, but more will be needed as winter wheat emerges from dormancy. Further north, in the northern U.S. Plains and Canada, the trade is watching conditions ahead of spring wheat planting. It looks like mild conditions for most of the winter boosted prospects in Russia, with a Russia weather forecaster reportedly projecting the crop at 7% to 9% poor to very poor, up on the year, but well below the rating of 22% in December. The global supply fundamentals remain bearish. China says it will increase its minimum purchase price for wheat. Beijing has sold a substantial amount of wheat from state reserves this year as livestock feeders seek alternatives to higher priced ingredients. DTN says South Korea is tendering for 140,000 tons of feed wheat.