Soybeans, corn bounce off recent lows
Soybeans were higher on short covering and technical buying. Contracts are oversold after the move to multi-month lows but want to see definite improvements in demand from China. While it remains of global concern, reports of coronavirus have slowed down in China and the broader market roared back to start March. Tariff waiver applications are expected to start this week, which could help U.S. beans regain some of the market share lost to Brazil’s less expensive supply. Brazil’s harvest is 40% complete according to AgRural with good anecdotal yields in most areas and Argentina did not announce new export taxes over the weekend as had been expected. Export inspections were bearish this week but remain ahead of last marketing year’s pace at roughly the halfway mark. Soybean meal and oil followed beans higher. The USDA says January’s soybean crush was 189 million bushels, up 4 million from December and 6 million from January 2019. The crush in 2019 was about 2.297 billion bushels, down 1% from 2018.
Corn was higher on short covering and technical buying. Corn bounced off the recent contract lows and watching conditions in South America. There have been some planting delays for Brazil’s second crop and some weather concerns for Argentina, but overall, conditions look good. Both nations have become big competitors for the export market share, along with Ukraine. The trade is also monitoring weather in the U.S. ahead of widespread planting. The USDA’s prospecting planting report is out March 31st, along with quarterly grain stocks. Weekly export inspections for corn were bearish, but it was a good week for sorghum and there’s been more chatter about increasing Chinese interest in U.S. sorghum. Ethanol futures were steady to modestly higher. The USDA says corn for ethanol use consumption in January was 469 million bushels, down 2% on the month, but up 6% on the year. The 2019 total was 5.331 billion bushels, a decline of 4%, with dry mill co-production production also lower.
The wheat complex was mixed, with Chicago modestly lower, Kansas City modestly higher, and Minneapolis firm. Conditions mostly look good for hard red winter wheat and spring wheat planting delays are probable in some areas, while some soft red winter areas remain excessively wet. Soft red winter supplies are tight, but Chicago still drifted lower on light long liquidation. The International Grains Council projects a record world crop this year and global fundamental outlook continues to be bearish, with new supply and demand estimates out on the 10th. With just about a quarter left in the marketing year for wheat, export inspections were more than what’s needed to meet USDA expectations. Market data firm Refinitiv says France’s non-European Union soft wheat export sales in February were 1.46 million tons, the highest for that month in at least a decade. DTN says Morocco is tendering for 354,000 tons of durum and Thailand is in the market for 240,000 tons of milling wheat.