All eyes were on USDA’s WASDE report, however, as many had predicted, the March report failing to shake up grains prices too much.
Corn prices finished modestly lower, with soybean futures rising less than 0.5%.
On the contrary, Chicago SRW winter wheat contracts proved to be the day’s biggest winner led to double-digit gains.
Wheat prices, indeed, tilted moderately higher on the heels of some supportive supply and demand data from USDA, which spurred some technical buying.
Soy meal ended split with spring and summer contracts up 30 to 90 cents and deferred contracts $1-plus lower.
Soy oil posted new contract highs and settled near those highs with gains ranging from 81 to 109 points.
Really, USDA’s outlook for U.S. wheat supply and demand was also left mostly unchanged this month.
USDA noted improved white wheat exports after recent demand from China and South Korea.
Conversely, hard red winter wheat exports tilted lower.
US ending stocks held steady at 22.752.013 t, with analysts expecting to see a 81.645 t increase from February.
USDA left the season-average farm price unchanged, at $5.00 per bushel.
Globally, USDA anticipates larger supplies, increased consumption, higher exports and reduced stocks.
The world’s total global ending stocks for 2020/21 declined slightly to 301.164 million tonnes, bucking analyst expectations of seeing a small increase.
Only a few margin changes affect Russian cereal production, with wheat production being revised up by 54,000 tonnes, barley up by 29,000 tonnes and maize production down by 128,000 tonnes.
Only the export potential for Kazakh wheat is revised up from 0.2Mt to now 7.5Mt.
The ending stocks whether wheat, barley or corn remain unchanged for the trio of the Black Sea namely Russia, Ukraine and Kazakhstan
Russia’s wheat exports in February are estimated to reach 3.761.158 t, which is a moderate improvement over January’s tally but otherwise the lowest monthly total since last July, according to the Soviet Ag.
Mean time, Kansas, the No. 1 wheat production state in the U.S., saw quality ratings move lower again last week, dropping to 36% rated in good-to-excellent condition.
Texas (the No. 2 production state) also saw quality ratings decline, with 27% of the crop in good-to-excellent condition.
All this pushed up wheat prices on Chicago yesterday.
However, wheat is going to need a pickup in export demand to fuel sustained price strength barring unfavorable spring weather.
Corn prices, on the contrary, faded after USDA reported larger-than-expected ending corn stocks, which prompted some technical selling.
USDA held U.S. corn ending stocks stable in this morning’s WASDE report, at 38.15 million tonnes.
Analysts were expecting a moderate reduction, however, with an average trade guess of 37.36 million tonnes.
USDA also held the season-average farm price steady from February, at $4.30 per bushel.
Global production in 2020/21 is expected to creep modestly higher, with USDA tacking on an additional 5.9 million tonnes since February.
The agency expects increases in places like India, South Africa and Bangladesh to more than offset decreases in Mexico.
After noting some various changes to export and import levels, USDA marks global ending stocks at 287.695 million tonnes, moving slightly higher month-over-month.
USDA, indeed, kept its 2020-21 Chinese corn import forecast at 24 MMT.
Chinese demand continues to hinge on the extent of the African swine fever outbreak in China and impact on feed demand.
Trade attention will remain on Argentina weather for another few weeks and then the focus will turn to the Brazilian safrinha corn development into June.
The next big USDA reports will come on March 31 when the Quarterly Grain Stocks and Prospective Plantings Reports are released.
Meantime, Brazil’s Anec forecasts the country’s March corn exports at a modest 137.167 t.
That is roughly double Anec’s estimates from a week ago, however.
Soybean prices dropped sharply immediately following WASDE report but recovered by the close.
Traders are still looking to balance expectations of a record-breaking crop in Brazil against historically tight stocks in the U.S.
USDA’s estimates for soybean usage and supplies, indeed, are mostly unchanged this month.
Total soybean crush for the 2020/21 marketing year is expected to reach 59.87 million tonnes, with exports coming in around 61.23 million tonnes.
US ending stocks held steady, at 3.265.839 t, although analysts expected the agency to trim that total by another 81.645 t.
But even so, US domestic stocks remain historically low for now.
USDA’s season-average farm price projections also remained stable, at $11.15 per bushel.
Globally, with 83.74 million tonnes of ending stocks in soybean, USDA’s forecast calls for higher production, exports and ending stocks.
Total oilseed production (including soybeans, canola, sunflower oil, etc.) moved slightly higher.
In South America, USDA raised its estimates for Brazilian production to 134 million tonnes while slightly trimming Argentinian production to 47 million tonnes.
Brazil is facing plenty of logistical problems in recent days.
There have been reports of trucks loaded with soybeans waiting for up to two days to unload the grain at shipping facility.
Buyers don’t like disruptions.
Brazil is expected to export a monthly record of more than 15,5 million tonnes of soybeans in March.
Meantime, Safras & Mercado estimates the 2020/21 Brazilian soybean crop will reach130 million tonnes.
This projection is lower than other recent estimates, but the consultancy is docking quality and yields due to late-season rains, which have also slowed harvest pace significantly.
Leading into tomorrow’s weekly ethanol updates in the US, news reports about more US ethanol boats sailing to China are doing the rounds.
Isn’t yet confirmed if these three are actually new boats or a re-report on the ones that loaded in mid-Feb, but either way the flow is expected to continue with more still to load.
Meantime energy futures were mixed.
Crude oil dropped 1.5%, hovering near $64 per barrel.
Diesel was down fractionally, while gasoline inched slightly higher this afternoon.
About European market, Matif at the end finished in the red after the publication of the broadly neutral USDA report.
Europeans wheat and corn reacted to the downside, but, rapeseed for its part suffered the most notable losses, penalized by a further contraction in international crude prices, and this in spite the USDA also inflated European imports by 300 kt, moving to 6.3 Mt.
A new record.
The increase in Australian availabilities allows this adjustment in particular.
Also Black Sea cash markets on old crop wheat are seeing some pressure.
More farmer sales are being reported and windows are tight prior to new crop harvest.
The generally optimistic new crop outlooks not hurting anything either.
Aussie post-holiday market was little changed from Friday.
Early reports emerged of east coast forage grains seeding and more interest in early plantings of canola, with April only a few weeks away.
On the international scene, it is the call for tenders from Algeria that arouses comments.
The volumes used remain uncertain and the origins could be multiple with regard to the prices displayed.
Algeria’s OAIC wheat tender from the other day reportedly trading ~US$323-4/t candf range.
Plenty of interest to see where these will load from (as always, optional origin) given the numerous calculations on very tight French (and EU in general) wheat balance sheets and the messy freight market right now.
We will see tonigth how the sessions will close.
