Soybeans down on bearish export numbers
Soybeans were lower on fund and technical selling. Weekly export sales were a marketing year low, with Brazil continuing to hold a big share of the market because of the dive in their currency, even as domestic prices hit record levels for several commodities, including beans. Egypt was the big buyer for U.S. beans last week and there were several sales switched from unknown destinations to other destinations. Contracts are oversold, but it’s hard to get any kind of traction right now. The broader market was also generally bearish during the commodity session. Soybean meal was mostly weak, consolidating and watching Argentina, while bean oil followed beans lower. The Rosario Grain Exchange projects Argentina’s soybean crop at 50.5 million tons, with 25% of the harvest complete. The USDA’s attaché in Paraguay estimates 2020/21 soybean production at 10.25 million tons, compared to 10.77 million for 2019/20. 2019/20 exports are seen at a record 6.67 million tons.
Corn was mostly fractionally lower on spread adjustments. Export sales were down on the week and the overall supply outlook remains bearish. Corn shipments were more than what’s needed to meet USDA’s projection for the marketing year, which has passed the halfway point. China didn’t buy any U.S. corn this week, but their domestic prices are at near 5-year highs on the drop in U.S. prices and increased demand for feed use. INTL FC Stone says weather issues in Brazil could trim their second corn crop, currently estimating production at 73.9 million tons. The Rosario Exchange sees Argentina’s corn crop at 49.8 million tons, down 200,000 tons because of weather problems. Ethanol demand is also a bearish factor and while planting delays are probable, it is still early in the season for most key U.S. growing areas. Ethanol futures were higher. Governors in five U.S. states are asking the Trump administration for national waivers exempting the oil industry from biofuel regulations. Sorghum export numbers were bearish, but the supply outlook is neutral, with solid demand from China.
The wheat complex was lower on fund and technical selling. Crop weather concerns in the U.S. are on the back burner with a bearish global supply outlook. Those fundamentals erased an early gain by Kansas City, which was up on those forecasts for freezing conditions and there is the probability of planting delays for spring wheat in the northern U.S. Plains. Many soft red winter growing areas remain wetter than normal. China did buy old and new crop U.S. wheat last week but the weekly export numbers were bearish with less than two months left in 2019/20 and most forecasts have improved crop weather for Russia and Ukraine. Ukraine’s government says it will ban exports if sales exceed Kyiv’s target. France’s AgriMer sees 2019/20 soft wheat sales outside of the European Union at 13.2 million tons, up 500,000 from their prior projection. Strategie Grains projects E.U. soft wheat stocks at 13.7 million tons, compared to the previous guess of 12.5 million on slower demand because of coronavirus, while trimming 2020/21 production to 135.0 million tons. Egypt reportedly bought 120,000 tons of wheat from Russia and 60,000 tons from France while DTN says Jordan is tendering for 120,000 tons of milling wheat.