Corn climbs, soybeans slump
Some much-needed rains are forecast in South America. While much more is needed in many key production regions, the news was enough to trigger some technical selling that left soybean prices around 0.75% lower. But concerns about Black Sea export disruptions amid a potential Russian invasion of Ukraine helped corn and wheat prices stay in the green Monday. Corn prices were up nearly 1%, with most wheat contracts finding gains of 0.5% to 0.75%.
A winter storm moving through the Midwest later this week will dump another round of rain, ice and snow in a band stretching through the Texas panhandle all the way through the Northeast. Next week, NOAA’s 8-to-14-day outlook predicts warmer-than-normal conditions for the eastern half of the United States between February 21 and February 27, with seasonally wet weather for the entire Midwest and Plains.
As the world braces for a potential Russian invasion of Ukraine, the Dow dropped another 308 points lower to 34,429. Stocks have generally been quite sensitive about any Ukraine-Russia headlines landing over the past few days. Energy prices jumped higher on current geopolitical tensions, with crude oil up another 2.5% to move above $95 per barrel. Diesel rose nearly 1.75%, with gasoline up 1.5%. The U.S. Dollar firmed moderately.
Last Friday, commodity funds were net buyers of all major grain contracts, including corn (+4,500), soybeans (+5,000), soymeal (+1,000), soyoil (+3,000) and CBOT wheat (+13,500).
Corn prices spent much of Monday’s session in the red until a late-session rally helped prices firm more than 0.75% higher by the close. Traders struggled to balance rains forecasted for South America versus heightened geopolitical tensions in the Black Sea region. March futures gained 5.75 cents to $6.5675, with May futures up 5.25 cents to $6.5575.
Corn basis bids were mostly steady to start the week but did firm 2 cents at an Iowa processor while dropping 3 to 4 cents lower at two other Midwestern locations on Monday.
Corn export inspections reached 57.3 million bushels last week, tracking 37% above the prior week’s tally of 41.9 million bushels. That was also better than the entire range of trade guesses, which came in between 37.4 million and 55.1 million bushels. China was the No. 1 destination, with 16.3 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately behind last year’s pace, with just under 790 million bushels.
Brazilian consultancy AgRural estimates that the country’s second corn planting progress has reached 42% in the Center-South, up from 24% a week earlier and substantially ahead of last season’s pace of 11%. AgRural currently estimates total 2021/22 corn production at 4.366 billion bushels.
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Preliminary volume estimates were for 314,309 contracts, shifting 33% below Friday’s final count of 471,582.
Soybean prices took a moderate step lower after some rainier weather forecasts for parts of Brazil and Argentina incentivized a round of technical selling and profit-taking in a choppy session today. March and May futures each dropped 11.75 cents to close at $15.7125 and $15.7450, respectively.
Soybean basis bids were mostly steady on Monday but did tilt 3 cents higher at an Illinois river terminal and 5 cents lower at an Iowa processor today.
Soybean export inspections eased slightly week-over-week, sliding to 42.4 million bushels. That was also toward the lower end of trade guesses, which ranged between 36.7 million and 55.1 million bushels. China was the No. 1 destination, with 18.7 million bushels. Cumulative totals for the 2021/22 marketing year remain well below last year’s pace, reaching 1.426 billion bushels.
Brazil’s soybean harvest is now 24% complete, per a report out from AgRural today. That’s up from 16% a week ago and well above last season’s pace of 9%. “With rains still very frequent, the harvest in Mato Grosso has advanced at intervals, with farmers rushing to get the soybeans out of the field before major quality problems occur,” AgRural noted. The consultancy estimates production will come in around 4.722 billion bushels.
Meantime, another Brazilian consultancy – Patria AgroNegocios – has served up major cuts to its latest estimates for 2021/22 soybean production. Patria lowered its prior projection by more than 10% to land at 4.482 billion bushels, which is one of the lowest estimates currently in the mix.
Preliminary volume estimates were for 247,879 contracts, tracking moderately lower than Friday’s final count of 344,661.
Wheat prices struggled to find traction but did end up with moderate gains by the close as tensions between Russia and Ukraine sparked another round of technical buying. Overseas prices also moved higher today on the same worries. March Chicago SRW futures picked up 2.75 cents to $8.0050, March Kansas City HRW futures added 6.25 cents to $8.3050, and March MGEX spring wheat futures gained 6.25 cents to $9.6775.
Wheat export inspections shifted incrementally higher from a week ago, reaching 16.0 million bushels. That was toward the higher end of analyst estimates, which ranged between 7.3 million and 20.2 million bushels. Mexico topped all destinations, with 2.6 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace, with 532.2 million bushels.
Russian consultancy Sovecon estimates that the country’s wheat exports will reach 95.5 million bushels in February, a month-over-month increase of 8.3%, if realized. Russia is the world’s No. 1 wheat exporter.
Last week, China sold another 19.1 million bushels of its state wheat reserves on auction. That was 99.3% of the total available for sale. This is the fourth such auction held so far in 2022 as an attempt to soften the blow of rising feed costs.
Taiwan issued an international tender to purchase 2.0 million bushels of grade 1 milling wheat, sourced from the United States, that closes on February 18. The grain is for shipment in April.
Algeria issued an international tender to purchase a nominal 1.8 million bushels of milling wheat from optional origins that closes on Wednesday. Algeria often purchases significantly more than the amount listed.
The Philippines issued a tender to purchase 1.7 million bushels of animal feed wheat from optional origins that closes tomorrow. The grain is for shipment in June and July.
Preliminary volume estimates were for 150,203 CBOT contracts, trending 17% lower than Friday’s final count of 181,949.
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