Corn ends two-sided session firm
Soybeans were mixed on commercial spread adjustments, consolidating after last week’s strength. Nearby beans were down, deferred months were up, watching development conditions and early harvest activity in Argentina and Brazil. AgRural says Brazil’s harvest is just 1.9% complete as of last Thursday, the slowest in 10 years because of heavy rainfall in some areas, or 2.5 million tons, compared to 8.9% a year ago, or 11.7 million tons. That lack of available beans probably means Brazil will not hit the expected export target for February. Safras e Mercado estimates production at a record 133.1 million tons, slightly more than the USDA, with the next set of projections out February 9th. Aside from the rain in southern growing areas, Brazil looks good, but Argentina is generally expected to see a drier pattern during the early part of this month as La Nina continues. Weekly export inspections were more than what’s needed to meet USDA projections for the current marketing year, with China and the Netherlands the biggest destinations. The Philippines bought 133,000 tons of old crop U.S. soybean meal Monday morning, but meal futures were mixed on spread adjustments, favoring new crop over old crop. Soybean oil was modestly higher, supported by global vegetable oil demand. The USDA says December’s soybean crush was 194 million bushels, in-line with expectations, up 3 million bushels from November and 9 million more than in December 2019.
Corn was modestly higher on commercial and technical buying after spending much of the session mixed. Corn was watching South America, along with conditions in the U.S. ahead of spring planting. Those soybean harvest delays in Brazil are pushing back second crop corn planting, just 2.15 planted in Mato Grosso, compared to the five-year average of 15.4%, while the USDA’s Ag Outlook Forum this month will have a preview of domestic acreage expectations with the official prospective planting numbers out at the end of March. Mexico bought 125,780 tons of old crop U.S. corn and Japan picked up 110,000 tons of old crop. Not the rumored sales to China, but a positive. Corn export inspections were neutral, Japan and China led the way, while sorghum was up on the week and the year, all to China. The USDA’s attaché in Ukraine projects 2020/21 corn production at 30.936 million tons, compared to the official estimate of 29.5 million and the 2019/20 total of 35.855 million tons. Exports are expected to be 26.1 million tons, compared to 28.929 million last marketing year. Ethanol futures were unchanged. The USDA says 430.44 million bushels of corn were used for fuel alcohol production during December 2020, down 1% from November and 10% below December 2019. DDGS production was 1,784,208 tons, down 1% on the month and 7% on the year. A truck strike is expected to start today in Brazil.
The wheat complex was lower on profit taking and technical selling, in addition to the higher trade in the U.S. dollar during the session. Russian wheat prices were lower heading into the U.S. session on increased sales ahead of Moscow’s export tax going into effect February 15th. The tariff starts at 25 Euros per ton, doubles on March 1st, and will likely last through the end of June. Even with that tariff, SovEcon sees wheat exports at 37.9 million tons, up 1.6 million from the last guess. That could lead to better demand for U.S. wheat, but for now, exports are slow. That includes export inspections, which were down on both the week and the year, with South Korea and Japan topping the list. The USDA’s attaché in Ukraine sees 2020/21 wheat production at 24.867 million tons, compared to the USDA’s official guess of 25.5 million, and the 2019/20 total of 29.144 million. Exports are estimated at 15.7 million tons, compared to 21.013 million last marketing year. The USDA says 231.485 million bushels were ground for flour during the fourth quarter of 2020, down 1% from the Q3 grind and less than 1% less than 4Q 2019. China says it sold 2,187,297 tons of wheat from state reserves last week, 54% of the offering and down sharply from recent events.