Soy trades higher; corn, wheat slide

Wheat

For the week ending Feb. 26, March Minneapolis lost 15.5 cents, March Chicago lost 7 cents and March Kansas City lost 6 cents.

Wheat closed mixed both Feb. 23 and 24. Despite strong spillover support from soybeans Feb. 24, the wheat market was unable to hold its early gains. Low temperatures could pose a threat to dormant winter wheat crops, but recent snow cover provides some protection. Meanwhile, the southwest Plains received snow early in the week with further beneficial moisture remaining in the forecast. On Feb. 24, unconfirmed reports of a 290,000-metric-ton sale of wheat to Egypt were supportive, as well.

Wheat was lower Feb. 25 as concerns about demand continue. The concerns remain despite an announced 120,000-metric-ton sale of wheat to Egypt. This is a portion of the Feb. 24 rumored 290,000-metric-ton sale, and is likely paid for by a $100 million credit given to Egypt by the U.S. The U.S. dollar remains in a sideways trend near its recent highs, limiting interest in U.S. wheat exports.

Wheat traded with small losses for a portion of the day Feb. 26, but finished mostly higher with spillover support from corn and soybeans. While the wheat market remains near its lows, the U.S. dollar continues to trade near the recent highs, keeping exports limited. The forecast is little changed with low temperatures a source of some concern for the southern plains while the southwest Plains received some much needed moisture Feb. 26 and expects more. Feb. 26 export sales were within the expected range and above the amount needed to keep pace with the U.S. Department of Agriculture's projection, but shipments continue to lag behind.

USDA estimated wheat export shipments pace for the week ending Feb. 26 at 18.4 million bushels. This brings the year-to-date export shipments pace for wheat to 605.8 million bushels, compared with 857 million last year at this time. Wheat export sales pace for the week ending Feb. 20 was estimated at 12.1 million bushels. This brings wheat's export sales to 784.1 million bushels, compared with 1.032 billion last year. With 14 weeks left in wheat's export marketing year, shipments need to average 21 million bushels and sales need to average 8.3 million bushels to reach USDA's 900-million-bushel estimate.

Corn

The corn market traded sideways this past week with the lack of fresh news. The futures struggled to start the week with pressure from the outside markets. The Ag Outlook conference also surprised traders with larger- than-expected acreage number for 2015. The futures did bounce back late in the week with small buying interest as we traded to three-week lows and spillover support from the soybeans. As of the Feb. 26 close, the March contract was down 5.25 cents for the week.

The corn market lost more than 6 cents to start the week on Feb. 23. Weakness came from pressure in the outside markets, with a stronger dollar and pressure in the energies. The USDA Outlook Conference also released a larger-than-expected corn acreage number for 2015. The weather around the world continues to be watched and the conditions in Africa are improving and remain near ideal in South America. Selling pressure remained in place on Feb. 24 and 25. The ethanol report also showed corn use down and stocks continue to grow, while ethanol producers remain in the red for the seventh week in a row.

The corn market traded slightly higher on Feb. 26 after posting three-week lows on Feb. 25, which did create some short covering. The soybeans were also strong and spilled over to offer support. Winter weather is also keeping feed demand up in the near term. The upside was limited with the very strong dollar and pressure in the energy markets. The export sales came in at the low end of estimates and shipments continue to lag. The corn market was slightly lower on the morning of Feb. 27.

Ethanol production for the week ending Feb. 20 averaged 947,000 barrels per day, down 1.76 percent from the previous week. Total ethanol production for the week was 6.629 million barrels. Corn used in production the week ending Feb. 20 is estimated at 99.44 million bushels and needs to average 101.75 million bushels per week to meet this crop year's USDA estimate of 5.25 billion bushels. Stocks were 21.594 million barrels, up 2.42 percent from the previous week.

USDA's export inspection report was bearish for corn at 35.5 million bushels, below the 39.6 million needed to meet USDA's projection. Corn export sales were estimated at 28.2 million bushels, above the needed amount of 14.6 million to stay on pace with USDA's estimate of 1.75 billion. The shipments came in at 34.1 million bushels, below the 39.1 million that was needed to keep pace with USDA projections.

Soybeans

As of the Feb. 26 close, March soybeans were 24.75 cents higher for the week while November soybeans were up 17.5 cents. At 10 a.m. Feb. 27, March soybeans were trading 6 cents higher and the November contract was up 0.25 cents.

Soybeans started Feb. 23 with light gains but gave them back throughout the session before closing slightly lower. Export inspections were weaker than the recent pace, but still significantly higher than the amount needed to keep pace with USDA's projection. South America remains the focus of traders' attention, with Brazil's harvest about one-third done and Argentina's weather good. The weather is expected to remain favorable for Brazil, as well, with drier conditions expected to ease the harvest in Mato Grosso while Rio Grande do Sul looks to receive beneficial moisture as soybeans fill pods.

Soybeans traded higher throughout the day Feb. 24 with the May contract showing 30-cent gains at one point before sliding back to close with more reasonable 16.75-cent gains. Strong gains in soy meal provided support as crush margins remain good. In South America, a truckers' strike threatens soybean movement as the harvest continues to pick up the pace. While trucker and port strikes are not unusual this time of year in Brazil, they do slow the movement of soybeans, potentially shifting some business back to the U.S.

On Feb. 25, soybeans moved lower, giving back a portion of the Feb. 24 gains. China showed weakness in its soy markets as it returned from the week-long New Year's holiday. Talk of disappointing early yields will need to be monitored over the coming days.

Soybeans were higher again Feb. 26, as transportation issues continue despite the Brazilian government and the truckers union coming to an agreement to end the strike. South America's weather remains favorable, both for harvest in central Brazil and for continued development in southern Brazil and Argentina. Feb. 26 export sales report was above the amount needed to keep pace with USDA's projection, and sales and shipments now total 97 percent of the projection as we near the mid-point of the marketing year.

USDA reported soybean export inspections pace for the week ending Feb. 20 at 35.3 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.516 billion bushels, compared with 1.322 billion last year at this time. Soybean export sales pace was estimated at 16.9 million bushels. This brings soybean's export sales to 1.731 billion bushels, compared with 1.594 billion last year. With 27 weeks left in soybean's export marketing year, shipments need to average 10.2 million bushels and sales need to average 2.2 million to reach USDA's estimate of 1.79 billion bushels.

Barley

USDA reported barley export inspections pace for the week ending Feb. 20 at 68,758 bushels. This brings the year-to-date export shipments pace for barley to 6.61 million bushels, compared with 6.56 million last year at this time.

For the week ending Feb. 26, cash feed barley bids in Minneapolis were unchanged at $2.70 per bushel, while there was no bid for malting barley.

Durum

USDA reported durum export inspections pace for the week ending Feb. 20 at 999,449 bushels.

Durum export sales were reported at 1.8 million bushels, bringing this year's total to 23.8 million bushels, compared with 17.4 million bushels last year at this time.

For the week ending Feb. 26, cash bids for milling quality durum were at $9.50 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $9.75.

Canola

For the week ending Feb. 26, the front month March canola contract lost $15.10 to $455 (Canadian). The March canola contract was sharply lower last week as it approaches its expiration, but the May contract was slightly higher as of the Feb. 26 close. The strong week in the Chicago Board of Trade soy complex provided support, as did good domestic crush margins. Farmer selling and some profit taking contributed to weakness at times during the week.

For the week ending Feb. 26, cash canola bids in Velva, N.D., increased 1 cent to $16.58 per hundredweight.

Sunflowers

USDA estimated soybean oil export sales pace for the week ending Feb. 20 at 14.2 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 573.4 thousand metric tons, compared with 532.7 thousand metric tons for last year.

For the week ending Feb. 26, soybean oil futures were 36 cents higher to $31.84. Cash sunflower bids in Fargo, N.D., were 30 cents higher on the week at $19.40 per hundredweight.