Markets were hesitant yesterday.
Even if fundamentals remain tight, climatic conditions are improving in South America thanks to beneficial rains especially in Argentina where soybean and corn plantings are ending.
Some analysts, infact, projects Brazil’s 2020/21 soybean production at 4.887 billion bushels, moving 18.4 million bushels above its prior estimate.
Acreage estimates remain steady, with 95.136 million acres.
Analysts says Mato Grosso (the No. 1 production state) is on the decline but other states have seen a “positive surprise” this season.
In Argentina, production of these two products is expected to be slightly below 50 million tonnes.
Ahead of this morning’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 40.4 million and 77.2 million bushels for the week ending January 14.
Analysts also predict soymeal sales ranging between 100,000 and 400,000 metric tons last week, plus another 10,000 to 30,000 MT of soyoil sales.
Estimates that 2021 soybean plantings in the U.S. will reach 90.080 million acres, which would be 8% above last year’s acres, if realized.
Assuming average yields of 52.0 bushels per acre, that would create a total harvest of 4.638 billion bushels this year.
So, soybeans yesterday started the session with moderate gains, which after evaporated and reversed into small losses by the close.
Also corn prices were not excellent, closing only slightly higher at the end of the session.
Only a flash sale of 13 million bushels announced during the day lent some support, while lower soybean and wheat prices were creating some headwinds.
Ahead of today’s weekly export report from USDA, analysts expect the agency to show corn sales ranging between 23.6 million and 47.2 million bushels for the week ending January 14.
However, the U.S. EPA reports that 1.15 billion ethanol blending credits were generated in December, up slightly from November’s tally of 1.14 billion.
And 447 million biodiesel blending credits were also generated in December, which is up moderately versus November’s total of 390 million.
In add, the Supreme Court ordered EPA to halt action on the three Last-Minut blending waivers and so another 260 million gallons of renewable fuel blending erased.
It’s like felling the production of three or four ethanol plants and so, scratching 90 million bushels of corn demand off the balance sheet.
Analysts are forecasting 2021 U.S. corn acres to reach 94.244 million acres, which would be 4% higher than last year’s tally, if realized.
Assuming average yields of 181.0 bushels per acres, that would leave a production topping 15.65 billion bushels this year.
Wheat contracts, are that faced the most downside, with some contracts losing more than 1.25% at the end, closing lower for the third consecutive session.
Traders await this morning’s export report from USDA for more direction.
However, analysts think the agency will show wheat sales ranging between 9.2 million and 23.9 million bushels for the week ending January 14.
Estimates that U.S. all-wheat plantings in 2021 will reach 45.281 million acres.
That includes 31.991 million acres of winter wheat, along with 11.490 million acres of spring wheat and 1.8 million acres of durum wheat.
Good news also in the Black Sea basin, with temperatures are increasing after the recent cold snap so, in this region, and with producers that are not too much worried regarding growing conditions.
In add, russian farmers are running a petition to demand a withdrawal of taxes on grain exports, explainnig that they are doing their best to ensure both the country’s food security and increase its export potential.
So, despite the dynamism of the demand, some concern surged again, due also the expansion of coronavirus cases in the world.
Flash export sales last night confirmed that a large chunk of US export sales hit the books during the recent sell-off.
Sales included 136,000t of old crop beans to China, and 163,000t to Mexico, 138,000t new crop wheat to Nigeria and 336,000t of old crop corn to unknown, destination most believe is China.
Algeria (OAIC) bought up to 390,000t non-durum wheat at tender.
Saudi Arabia’s SAGO is also back again, for LH Mar/FH April barley shipments.
However, a new case of swine fever has just been discovered in China, raising doubts also about the future situation.
Just a note, with EU and Black Sea origin markets extremely firm, may could come the Aussie replacement, but the key question will be timing/logistics around slot availability.
In the meantime, australian local markets remained firm with SA wheat in particular bringing a strong showing yesterday.
ASW wheat price pushed over $320/t.
Aussie barley was firmer too, by another $3-5/t, in fact, with the SAGO tender out there’s more hope going round for further prices support.
We will see tonigth, how will close the sessions.
