Feb 25 – Morning Comments

Soybeans retreated in the overnight session giving up 6 cents a bushel. Wheat and corn were mixed with prices mostly unchanged in the night trade.

Beans have been on a tear in recent sessions thanks to weather problems in South America. In the key state of Mato Grasso in Brazil rains have been intense over the last week dropping 10 inches of precipitation as farmers there get ready to harvest. Overall, 30% of Brazil’s crop has been harvested, 5% below the pace this time last year. A large swath of rain is expected over key producing areas in the coming days which could further exacerbate the problems. Overnight, Brazil announced that its number 2 soybean port Rio Grande would be down for two weeks as a result of an accident. For the US, this has helped prop-up not only nearby prices but pushed May & July futures higher as well as the US export window could widen. On Monday, USDA released their export inspections report which showed beans at 1.27 MMT. Although this was at the low end of trade expectations of 1.2 to 1.5 MMT, it nonetheless is an impressive volume for this time of year.

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In corn, prices have shown little upside after achieving the $4.50 mark last week. News that Ukraine’s political unrest could be ending has some thinking the export market there could improve. In the US, weekly export inspections totaled 791,497 MT, which was on par with trade expectations of 700,000 to 825,000 MT. Overnight, a South Korea feed group announced a tender to buy 70,000 MT of corn.

For wheat, weekly export inspections of 427,000 MT were on par with expectations of 350,000 to 450,000 MT. Canada continues to struggle with grain logistics, as Canada Ag Minister Gerry Ritz said railways there are delivering grain only to British Columbia ports for the short term, and not to the US or Thunder Bay, Ontario.  Overnight, the Taiwan flour millers association announced a tender to buy 83,150 MT of US milling wheat, while a South Korea feed group announced a tender to buy 60,000 MT of feed wheat from any origin. China’s wheat imports soared 305% year on year to reach 725,942 MT in January. The country mainly imported wheat from Australia, US, Canada and Kazakhstan.