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Talk about getting kicked while you are down today... wheat was the biggest loser. Technically, CBOT soybeans hit a 6-week high ($12.17-1/2 per bu) early this morning, before falling off sharply (about 2%) by noon on weakness from the wheat complex spilling over. Fundamental headlines were ample today from exports to cancellations to production reports.
This morning, the USDA confirmed the sale of 100,000 tonnes of U.S. corn for delivery to Mexico in 2023/24.
In today's export sales report, U.S. wheat sales were a marketing year low last week with cancellations from China but were still net positive. Japan, Mexico & Taiwan bought corn, and a few cargoes of soybeans were switched to China.
Tomorrow morning’s February NOPA soybean crush is expected to come in at 178.1 million bushels, down from 185.8 mbu in January but above 165.4 mbu last February, and topping the largest Feb figure on record (166.3 mbu in 2020) if realized. Trade estimates range from 170.2-185.5 million bushels.
March has also started extremely warm but mixed on the precipitation. Since the end of January, drought has expanded in the Midwest. 72% is now abnormally dry vs 54% at end of Jan, and 42% is in D1+ (moderate) drought vs 23% at end of January.
Internationally..
Russian ag consultancy IKAR expects Russia’s 2024 grain crop to total 147 MMT, including 93 MMT of wheat, Russian news agency Interfax reported. In 2023-24, Russia produced 144 MMT of grain, including 91.6 MMT of wheat (and that was a big crop that they are still working to get rid of by undercutting the global market).
The International Grain Council (IGC) forecasts global wheat production for 2024-25 at 799 MMT, up 10 MMT from 2023-24.
Today it was also reported that China has cancelled or postponed approximately 1M tonnes of wheat from Australia, which has been by far China's largest wheat supplier for the past 2 years. In the last week or so, China has cancelled U.S. & Aussie cargoes, but no confirmation of French. Chicago wheat futures hit nearly 3.5 year lows earlier this month, China appears to be walking away from more expensive purchases. With their domestic winter wheat crop in good shape and forecasts looking favorable, coupled with their largest wheat imports since 1991 seen last year, China must be feeling much better about their current supply. We saw USDA address this to an extent on last week's WASDE, dropping their China wheat import estimate by 1 MMT to sit at 11 MMT, and it will be interesting to keep an eye on their expectations in the months ahead if we continue to see more of the same.
The Rosario Grain Exchange increased its Argentine soybean production forecast by 500,000 MT to 50 MMT after recent beneficial rains. It maintained its estimate of Argentina’s corn crop at 57 MMT but warned of fields being impacted by spiroplasma (corn stunt disease).
Funds were thought to have been all sellers today.
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