In late US futures trading Tuesday, wheat prices were sporting sharp gains of 19 to 25 cents a bushel and at two-week highs. Reports from Australia Tuesday said their domestic 2019-20 wheat harvest was the lowest in over 10 years, and also lower than analysts expected, due to a serious drought near the east coast of the country. Also, there is cold, wet weather in US wheat regions that could also nip production potential in those impacted areas. Combine that with southern European and northern African wheat regions that are expected to continue to see less than normal rains in the next couple weeks. Technical traders of wheat that had gotten short (sold) the futures market the past couple weeks were likely forced to cover those shorts Tuesday, adding to the upside price pressure. Tuesday’s weekly USDA export inspections report showed 501,990 metric tons (MT) of US wheat inspections in the latest reporting week, compared to 567,349 MT inspected last reporting week.
Corn futures are around 5 cents up, supported by the big gains in the wheat markets. China said it will accept tariff exceptions for US products starting March 2 to meet its obligation to buy $200 billion of US products over the next two years. Weekly US corn export inspections of 795,228 MT versus 788,549 MT last week, and were near the upper end of expectations. The grain market traders are awaiting the USDA annual Outlook Forum that begins Thursday and Friday, and will provide fresh supply and demand forecasts for the grain markets.
Soybean futures are steady to slightly up in late action Tuesday. Bean traders remain skeptical China will be buying many US soybeans with a record crop being harvested in Brazil and prices there below U.S. soybean prices on the world market. Reports said the AgRural consultancy raised its Brazilian soybean production to 125.6 million MT. The National Oilseed Processors Association (NOPA) on Tuesday reported soybeans crushers in the US processed a record 176.940 million bushels of soybeans in January--up from 174.812 million bushels crushed in December and above the January 2019 crush of 171.630 million bushels. The January crush was also above market expectations. Good soybean crush margins and demand for soymeal fueled the stronger-than-expected processing pace, analysts said. Soybean oil stocks at the end of January were 2.013 billion pounds, the highest since April 2018 and above market expectations.