Soybeans down, still up on week
Soybeans are lower on profit taking and technical selling, put still posting week to week gains. China’s tariff cuts went into effect Friday, the 30-day implementation period for Phase One ends Saturday, and expectations are for China to start issuing tariff waivers soon. That’s because the tariff on U.S. beans will remain at 27.5%, allowing Brazil to maintain some degree of a competitive advantage. Brazil’s soybean sales to China are expected to fall because of the Phase One agreement and coronavirus, with estimates ranging from 2% to nearly 20%. 45% of Brazil’s crop is harvested, ahead of average, with sales running ahead of 2018/19 and some 2020/21 sales also reported. Soybean meal and oil followed beans lower. The National Oilseed Processors Association’s January member crush report is out on the 18th, with the average guess at 173.748 million bushels.
Corn was lower on fund and technical selling, cementing modest weekly losses. Even after the recent spike in sales, corn exports continue to be slower than expected with plenty of competition from Argentina, Brazil, and Ukraine. Brazil’s forward corn sales are ahead of average, partially because of the recent weakness in their currency. The USDA lowered its’ 2019/20 U.S. export projection this past week and if the slump continues, could do so again March 10th. Crop conditions generally look good for most of South America, with non-threatening forecasts through the end of the month. Ethanol futures were higher.
The wheat complex was lower on fund and technical selling, with the most active months posting week to week losses. Wheat sales have been better than expected with just about a quarter left in the marketing year, but the U.S. is still losing big sales to other exporters. The trade is also monitoring U.S. winter wheat conditions, with recent precipitation helping hard red winter, but possibly hurting soft red winter. The USDA’s next set of monthly state crop weather stories is out the week of the 24th and weekly reports resume in April. Wheat is also monitoring conditions in spring wheat growing areas ahead of planting. Strategie Grains has soft wheat production in the European Union at 138.6 million tons, down 1.2 million from their previous projection. AgriMer says 65% of France’s soft wheat crop is in good to excellent condition. APK-Inform reports nearly all of Ukraine’s winter crops are in “perfect” condition. DTN says Jordan, Syria, and Turkey all have open wheat tenders.