Soybean futures held double-digit gains early on Monday but slid later in the session to finish about 9 cents higher following strong in China’s soybean market, which was back in action after a week-long holiday for the lunar New Yyear.
Corn and wheat were lower throughout the day amid more gains in the dollar and fund selling. Weekly export inspections were better than expected for all three crops, but that was not enough to overcome the selling pressures in corn and wheat.
Outside markets were mixed with Wall Street down about 30 points, crude oil down 77 cents a barrel and gold up $13.3 an ounce when the crops closed. The dollar was higher for the fourth straight session but still shy of the highs set early in January.
Exports – USDA, Reuters:
- USDA weekly export inspections: corn 43.8 mln bu. vs 41.8 million previous week, soybeans 60.1 mln vs 60.1 mln and wheat 22.7 mln vs 12.2 mln.
- Saudi Arabia bought 1.5 million metric tons of feed barley. Traders said the grain may come from Argentina, Australia and Europe.
- Results are awaited on Ethiopia tender to buy 720,000 metric tons of optional-origin milling wheat Offers were due Feb. 3. Shipment will be within three months of when letters of credit are opened, which could be March to May.
Corn closed lower for the third straight session with March coming to rest at the 20-day moving average.
Funds were noted sellers again. Funds were briefly net long corn two weeks ago but Friday’s CFTC report showed they were back to being net short for the week ended Jan. 31.
Corn harvest under way in Argentina and Brazil may have been slowed recent this week’s rain. Forecasts show scattered showers there the next few days. European corn for March was weak at about $4.65. China’s corn market jumped about a dime with the May contract at the equivalent of $5.93 a bushel. The price reflects conversions from local currencies and metric tons.
The CBOT estimated Monday’s corn volume at 201,433 compared with Friday’s actual volume of 241,126. Open interest in Friday’s flat market decreased by 2,932 with March’s down 13,716 and May’s up 5,448.
March corn closed down 1-1/2 at $3.63-3/4 per bushel and May dropped 1-1/2 to $3.71-1/4.
What to Look For: USDA updates U.S. and world crop supply/demand tables on Thursday. The trade expects U.S. corn ending stocks to be trimmed from January’s 2.36 billion bushels and world stocks to be down from January’s 221 million metric tons.
Soybeans finished with solid gains following China’s higher market and ideas Beijing may buy more soybeans this week now that the lunar holiday is over.
China’s soybean market bounded higher with the May contract up 0.6% at the equivalent of $17.18 a bushel. U.S. weekly export inspections were down slightly from the prior week but still better than expected.
Funds were buyers of soybeans on Monday. CFTC data showed funds reduced their net long positions in CBOT soybeans by about 20,300 contracts for the week ended Jan.31.
Some big numbers are forecast from Brazil’s soybean crop. Last week private firms in Brazil and here had estimates of more than 106 million metric tons. Estimates in U.S. trade surveys for Thursday’s report were more modest and averaged 104.1 million. In January, USDA had the crop at 104 million. The average estimate for Argentina dropped to 54.4 million from USDA’s January number of 57 million. Farm Futures is at 104 million and 54 million, respectively.
Soybean meal and soybean oil finished higher as well.
The CBOT estimated Monday’s volume at 225,666 compared with Friday’s actual volume of 186,178. Friday’s open interest increased by 1,277 contracts in the lower market with March’s down 8,053 and May’s up 4,982.
March soybeans closed up 9 at $10.36 per bushel and May up 9 at $10.46-1/4. New-crop November was up 7-1/4 at $10.17.
What to Look For – Trade estimates for USDA report have average soybean ending stocks at 412 million bushels vs January’s 420 million. Farm Futures is at 400 million.
Wheat futures closed lower after last week’s gains. The March soft red winter dipped under chart support at the 20-day average but remained above 50- and 100-day averages.
Winter wheat in the High Plains will be dry this week but wet in the 6- to 10-day outlook. Warm weather is expected later this week and next week for much of the U.S. wheat areas. Monthly condition ratings last week showed slight improvement in Oklahoma hard red winter and Midwest soft red winter, but a slight decline in the Kansas crop.
Friday’s weekly CFTC data showed funds increased their net short position in soft red winter wheat by 8,238 contracts and took more than 10,000 contracts off of their net long position in hard red winter.
The CBOT estimated Monday’s soft red winter wheat’s volume at 94,862 compared with Friday’s actual volume of 107,349. Friday’s open interest decreased by 2,949 with March’s down 4,960 and May’s down up 1,977.
Chicago’s March soft red winter wheat closed down 7-3/4 at $4.22-1/2 per bushel and May down 7-1/2 at $4.35-1/2. Kansas City’s March hard red winter dropped 4-3/4 to $4.35-3/4 and May fell 4-3/4 to $4.48-3/4. Spring wheat for March was down 3 at $5.55-1/4 and May slipped 2 to $5.54.
What to Look For – The average trade estimate for Thursday’s wheat stocks report was 1.176 billion in one survey, down from last year’s 1.186 billion. Farm Futures expected 1.184 billion.