news

ANOTHER ROUND OF GAINS FOR SOYBEANS, CORN

Soybeans were higher on short covering and technical buying, along with the higher move in bean meal…

Contracts remain oversold with traders watching weather in South America. Argentina could be mostly dry into February, but updated forecasts have improved chances of rainfall for parts of central Brazil this week. That stretch comes during key development phases in South America and early harvest activity in Brazil. The USDA’s next supply and demand report and CONAB’s updated outlook for Brazil are both out February 8th. Stateside, a survey by an ag publication is pointing towards higher soybean acreage this year. Soybean meal was up on oversold signals and demand expectations, while soybean oil ended what had been a mixed session firm, thanks to beans and meal.

Corn was modestly higher on short covering and technical buying. It was an up and down day with corn keeping an eye on conditions in Argentina and Brazil. Conditions look good in most of Argentina in the early part of a drier pattern, while conditions have improved enough in Brazil to pressure their domestic deferred prices ahead of widespread second crop planting. Near-term export demand should stay solid, but ethanol margins have softened, with the estimated margin for the average Iowa plant starting 2024 in the red. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. The trade is also keeping an eye on precipitation in the Corn Belt ahead of U.S. planting. A survey by an ag publication indicates farmers intend to plant fewer acres of corn in 2024.

The wheat complex was mostly higher. Wheat was up early before turning mixed seeing support from oversold signals and pressure from the higher dollar. That relative strength in the dollar is one of the factors squelching global demand for U.S. wheat. The recent precipitation in the Plains and Midwest has likely boosted winter wheat crop conditions ahead of the USDA’s monthly state stories next week.

Near-term forecasts for hard and soft red winter growing areas are mixed, but parts of both regions should see more near-term precipitation along with warmer temperatures. A farmer survey by an ag publication indicates a decline in planted area for all types of wheat in 2024, with a drop in spring offsetting a rise for winter wheat. The USDA’s 2024 prospective planting numbers are out at the end of march. Agriculture and Agri-Food Canada estimates 2024/25 wheat production at 33.3 million tons, which would be up 4.2% from 2023/24. Reports from Australia have a better-than-expected wheat crop following a less impactful El Nino pattern. That’s likely going to further cut the competitiveness of U.S. wheat on the export market, already suffering because of Russia’s dominance of world wheat trade.

Source:https://brownfieldagnews.com/market-news/another-round-of-gains-for-soybeans-corn/