Grains, oilseeds decline after USDA numbers
Soybeans were lower on commercial and technical selling, up from the lows, but adding to what already would have been a down week. The 2023 U.S. crop was a little bit larger than expected, pulling ending stocks higher, while quarterly stocks were lower. There were no major changes to the U.S. supply and demand tables, just a slight reduction in residual use. The USDA raised its crop outlook for Argentina and while Brazil was down, it’s still above the most recent guess from CONAB. However, that’s probably due to USDA’s tendency to make conservative changes until yields really start rolling in, with activity just getting underway in key growing areas. Imports by China were left at 102 million tons. Soybean meal and oil followed beans lower. USDA left domestic soybean product ending stocks unchanged, while lowering the global outlook slightly.
Corn was lower on commercial and technical selling, just above the day’s lows, cementing the lower weekly finish. The USDA confirmed record large production and a record high yield last year, with increases for ending and quarterly stocks. Also, in the supply and demand report, the USDA raised feed and ethanol use estimates, while leaving exports unchanged despite the recent pop in demand. The USDA did lower production and exports for Brazil, while still expecting Brazil to be the world’s largest corn exporter this marketing year. The big test for Brazil will be the second crop, which is planted after soybeans are harvest. The USDA’s next round of supply, demand, and production estimates is out February 8th.
The wheat complex was lower on fund and technical selling, with the most active months at the three U.S. exchanges seeing week-to-week declines. World wheat ending stocks and quarterly U.S. stocks were larger, but U.S. ending stocks were slightly lower than last month. That was due to lower beginning stocks, or 2022/23 ending stocks, along with a slightly lower seed use guess. Globally, ending stock and production were up. USDA increased production and export estimates for Russia and Ukraine, along with exports for Australia and Canada. Exports were down and imports were up for the European Union. U.S. winter wheat planting was down 6% on the year, with declines for all classes, while 2023 spring wheat production was up from 2022.
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Author: John Perkins