Grain prices were mixed once again Thursday.
Wheat was the clear winner, as wheat prices continued their recent rollercoaster ride yesterday with a round of significant technical buying that pushed some contracts more than 3% higher as traders continue to assess likely winterkill damage in the U.S. and reports of lower production potential in Russia.
One private Russian analyst group, indeed, has cut their wheat crop estimate in recent days and spurred some discussion on the spec side.
By contrast, many in the physical market have been gradually lifting internal estimates and gaining optimism about minimal winter kill, a few spots of ice crusting but not major.
Spring is rapidly approaching and we’ll could see broader confidence in crop estimates and winter kill figures only as temperatures start to rise.
On the contrary, corn and soybean prices spilled into the red after USDA predicted historically large acres for both crops this upcoming season.
Both grains closed about 0.6% lower yesterday.
Corn and soybean prices faded on the heels of USDA’s announcement yesterday that thinks U.S. farmers preliminary areas estimates for row crops will for corn at 92 million acres and for beans at 90 million for a total pie of 182 million, a new record.
That led to some technical selling, with spillover weakness from soybeans also proving problematic.
Their full projected balance sheets are due out today during the Forum’s 2nd day.
As always these are only USDA estimates, and initial survey-driven figures are not due out until March with the USDA Prospective Plantings report.
The USDA also pegged wheat acres (total) at 45 million, which was slightly below the average surveyed ideas but as “needed” to get the higher corn/bean pie.
In add, USDA estimates 2021/22 season-average prices that for corn will come in at $4.20 per bushel, for soybean will come in at $11.25 per bushel, for wheat will come in at $5.5 per bushel.
US regular export sales will be out later today, with the holiday delays, and there’s some speculation that we may see more flash sales hit with China back in business.
In fact, many are noting the stronger Chinese board movements yesterday.
China had been closed for the holidays and, in a large part, trading back up on the moves we’ve seen globally during that window.
Analysts think the agency will show wheat sales ranging between 340.740 t and 951.851 t.
For soybean show a wide range of trade guesses between 477.700 and 1.633.000 t.
Analysts also expect to see soymeal sales ranging between 100,000 to 350,000 metric tons last week, plus another 5,000 to 25,000 MT of soyoil sales.
While for corn sales they expect ranging between 1.312.500 t and 2.212.500 t.
The week interested, is that ended February 11.
However, as we know, bull markets need to be fed on a near-daily basis, but some experts worry that the current climate isn’t providing enough “food” for a sustained rally.
While we do not feel wheat, corn and soybean futures prices will fall dramatically lower, there is little incentive for prices to rally higher in the short term.
Indeed, warmer weather will soon be on its way to the central U.S., and most of the Midwest and Plains will see at least a trace amount of rain or snow between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts seasonally wet weather in store for the eastern Corn Belt between February 25 and March 3, with warmer-than-normal temperatures returning to the eastern half of the country.
The Argentine weather maps seeing some more rains into the end of the month, with a widespread inch on the latest runs across most of the soy areas there, even if still well below normal.
However, the trade’s also starting to get more confident on the Brazilian soybean harvest pace with reports of fieldwork pushing along there.
This is also still well behind schedule and making a mess of export logistics but gradually making progress.
In add, the EPA announced yesterday that the U.S. generated 1.08 billion ethanol blending credits in January, which was slightly below December’s tally of 1.15 billion blending credits.
The U.S. generated 300 million biodiesel blending credits last month, falling substantially short of 447 million in December.
The latest data from the U.S. Energy Information Administration showed weekly ethanol production taking moderate tumble, dropping to a daily average of 911,000 barrels for the week ending February 12.
That was a week-over-week drop of 2.8%, pushing last week’s production to the lowest level since late September, with higher stocks to 24.3 million.
Aussie local markets took a breather yesterday with the board off, exporters getting filled from earlier in the week, and bids generally sliding across the country.
Australia northern east coast domestic feed markets are remaining mostly steady, with liquidity fairly sparse, attracting demand in places.
ASX east coast wheat futures settled $6.50/t lower nearby to $292.50 March and the new crop January contract was down $4.30/t to $302.70.
On the international scene, Egypt purchased 30,000 metric tons of soyoil in an international tender that closed earlier yesterday, which is for arrival during the first half of April.
Pakistan issued an international tender to purchase 407.407 t of wheat from optional origins.
Offers must be submitted by March 2, with shipment just two weeks after they are finalized.
Japan purchased 111.000 t of food-quality wheat from the United States in a regular tender that closed earlier today.
The grain is for shipment between March 21 and April 20.
Tunisia issued an international tender to purchase 137.000 t of soft wheat, 125.900 of durum wheat and 170.370 t of feed barley, which closes today.
The grain, which can be sourced from optional origins, is for shipment in March and April.
A South Korean animal feed group purchased 88.000 t of animal feed wheat from optional origins in a private deal that closed earlier today.
The grain is for arrival by the first of July.
Another South Korean feed group also purchased 107.400 t of animal feed wheat from optional origins in a tender today.
That grain is for arrival by July 10.
