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Markets Mixed After Disappointing Corn Export Sales

Argentina Ag Attaché soy report; winter crop area update for Ukraine

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Argentina Ag Attaché Soy Report

  • The USDA ag attachĂ© in Argentina forecast the soybean crop at 47.5 million tonnes, slightly below USDA’s February projection of 48 million.
  • Analyst projections in February were for 44-49 million tonnes, with some increasing to 50 million recently.
  • The attachĂ© is forecasting higher soy crush demand of 41 million tonnes compared to USDA’s 39 million and above last year’s 37.6 million.
  • Soybean exports are projected to be only 6 million tonnes down from last year’s 6.7 million and below USDA’s forecast of 7.0 million.
  • The attachĂ© estimates current ending stocks at 14.9 million tonnes versus USDA’s 12.8 million estimate.
  • Similarly, the office forecasts new crop soybean ending stocks at 14.4 million tonnes which is significantly higher than USDA’s 12 million.
  • USDA will update its official forecasts in the WASDE report on March 9.

FBN’s Take On What It Means: The lower crop forecast likely takes into account the less than ideal growing weather the country has experienced. The crop is still far from being made and will need more moisture later this month during pod fill. Argentina’s farmers continue to hold back a significant amount of their production as a hedge against currency devaluation. While higher ag prices have helped slow the Peso’s decline, it will be difficult to convince producers to let go of stored supplies.

Fbn Advisor

Winter Crop Area Update for Ukraine

  • Ukraine’s State Statistical Service published planted area data for winter crops; the totals do not include Crimea.
  • Winter crops were planted under less-than-ideal conditions with the wheat crop planting well behind the average pace.
  • Winter wheat area is 6.7 million hectares, up from 6.4 million last year.
  • The government is projecting a harvest of about 29-30 million tonnes.
  • Winter barley area came in at 1.08 million hectares, up marginally from 1.05 million last year; spring barley accounts for about half of Ukraine’s crop.
  • The government is forecasting barley production at 9.5 million tonnes.
  • Rapeseed plantings are estimated at 1.01 million hectares, down from 1.3 million last year. The government released updated production projections overnight, forecasting rapeseed production between 2.5-2.7 million tonnes.

FBN’s Take On What It Means: The lower rapeseed plantings are supportive to bean oil in the coming crop season and are another element suggesting the high price environment will remain a feature into 2021. Higher winter wheat production seems to be a theme across the Northern Hemisphere, which is likely to weigh on Chicago wheat futures into the new crop year as long as weather problems do not appear.

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