Report confusing, negative numbers not killing soybeans

The Feb. 8 report seems puzzling in the market reaction to negative numbers for soybeans. It likely means the traders care little about the numbers with weather uncertainty the dominant feature in the weeks ahead.

Just before the report was released, corn was up a half cent, soybeans up 4 cents, and wheat was down 5 cents.  At 12:15 pm corn was up 1 cent, soybeans up 1 cent, with wheat down 6 cents.

Corn ending stocks were reduced 125 million bushels to 2.353 billion bushels due largely to exports increasing 75 million bushels. Soybean exports were cut 60 million bushels with ending stocks increasing 60 million bushels to 530 million bushels. That much of a increase is a huge surprise.

Brazil soybean production was increased 2 million tons to 112 million tons. Argentina soybean production went down 2 million tons to 54 million tons.

The February USDA Monthly Supply and Demand Reports are often pretty boring with little fireworks being set off. The final production numbers from January are behind us with spring planting still several weeks away. The yearly planting intentions will be on Friday, March 30. Two week from now on February 22-23 will be the annual USDA Outlook Forum. Reports those two days will detail 10-year projections for just about anything grown in the U.S. relating to livestock and grains.

Weather continues to be the driver for all grains. The U.S. southeast continue to be dry as it pushed wheat up 14 cents on Wednesday. Wheat this week also crossed the 200-day moving average for the first time since August 2017. Traders will be closely watching scheduled weekend rains in Argentina where dry weather look s to be reducing both corn and soybean production.

Ideas of dry weather in South America looks to be reducing their corn production potential. In addition, planting issues last fall for corn in Brazil pushed more acres to second crop corn which can mean lower yields. It could be good news for U.S. corn exports and extend our exports two to three months longer than earlier expected.

The weekly U.S. export sales from earlier today had corn sales of 69.7 million bushels, soybean sales were 27.3 million bushels, while wheat was 14.5 million bushels. Corn sales were at the high end of expectations, soybean sales were above the high of expected, with wheat sales in the middle of trade expectations.

Trade expectations headed into the report had the U.S. corn and wheat ending stocks decreasing while U.S. soybean ending stocks were thought to be increasing due to likely the lowering of soybean exports. World ending stocks of corn and wheat looked to decrease a small amount with world ending stocks of soybeans thought to be a very small amount higher. In South America, traders thought corn and soybean production would decline in Argentina. They pegged soybean production in Brazil to increase with their corn production to decrease.

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