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Export data started us off strong, but profit taking took the top off gains, and pushed soybeans into the negative side of the spectrum to close out the week.
Strong U.S. export sales last week with corn & wheat above all expectations and soybeans & soymeal at the high end. Mexico showed up big in corn, and large bean volume was switched to China from unknown. Additionally on the sales side of things, this morning, the USDA confirmed the sale of 297,000 tonnes of U.S. soybeans for delivery to China in 2023/24. This sale (that will show up in next week's export sales report), however good at face value, is less than half of the normal activity China has performed on the same week in year’s past.
CBOT soymeal futures are trending in the complete opposite direction versus the last three years. During the final couple months before expiry, the 2020 March contract was among the lowest of the decade+ and 2023 was the highest. Good crop prospects for Argentina this year plays a role in this trend, as it has been a few years since the top meal exporter has had a solid yield outcome for soybeans.
The Brazil weather forecast still calls for rain chances to persist over most growing areas over the next 10 days. Far southern Brazil and Argentina are expected to be on the dry side through next weekend. Brazil’s crop size is now under constant review with harvest still in its early stages. Less than 10% of the crop has been taken up to date. Rain deficits remain, despite an upturn in rainfall. Brazil is running a 2-inch deficit from normal for the last 30 days. 55% of the belt is running less than 75% of normal with ¼ of the belt below 50% of normal. 1/3 of the belt is running near normal. Argentina’s corn crop stats were released yesterday afternoon and the BA Exchange’s report says the corn crop is 93% planted vs the 5 yr average rate of 92%. G/E ratings jumped sharply as the result of good rains and is now 46% G/E. The current crop is rated 41% better than a year ago. Argentina is tracking very close to normal for 30 day rainfall with 2/3 of the belt at normal with only 15% of the belt exceptionally wet. Subsoil maps are equally adequate with less than 10% of the belt in a subsoil deficit and 0% of the subsoil in surplus. Argentina soybean plantings have reached 97% complete and are on the average. Condition ratings climb modestly to 55% G/E and is the best rated in 3 years.
Funds were thought to have been mixed today with corn and wheat buyers and soybeans a seller. On Tuesday, corn was 20,000 contracts shorter than expected, soybeans were 40,000 contracts shorter than expected, and wheat was 5,000 contracts shorter.
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