Soybeans continued to rally overnight gaining 8 cents and eclipsing $13.50 for the first time since September. Wheat was also strong to the upside advancing 7 cents while corn lagged behind with only a 2 cent gain.
Soybeans continue to find support from strong short-run demand. Although Thursday’s export sales were below expectations, there continues to be buyers of US beans when many traders had expected it to dry up completely with Brazil beginning to harvest. Total bean sales year-to-date of 43.2 MMT far exceed the 41.2 MMT forecast for the entire year by USDA. Also helping give the market some upside was a forecast by USDA for long-term supply and demand showing 2014 soybean plantings at only 78 million acres, while some in the trade are expecting that number to come in at 80 million in USDA’s first survey at the end of March.
For corn, USDA’s 2014 planting numbers were higher than expected at 93.5 million. The big shocker is an ending stocks projection for 2014/15 of 2.6 billion bushels, a big jump from current stocks, just under 1.5 billion bushels. If realized, that kind of stocks would likely push corn futures into the mid $3 level. Corn exports continue to benefit from lack of competition from Ukraine. The ag minster their reported that Feb exports will continue to be slow with corn exports expected to only reach 2.4 MMT for February. In January, Ukraine grain exports fell by 40% month-on-month mainly due to port and rail issues which limited movement.
For wheat, flooding in Europe and dry weather in the US Plains is helping to give a bit of a lift to wheat prices after they hit a3-year low last month. However, India expects to harvest a record crop in 2014 with the ag minister there projecting production to top 95.6 MMT, up from 92.5 MMT projected by USDA in 2013. India already has burdensome stockpiles of wheat and continues to aggressively move supplies to the world market. Overnight, Iraq announced a tender to buy at least 50,000 MT of wheat from the US, Canada or Australia.