Market News

Soybeans extend rally, corn firm

Soybeans were higher on commercial and technical buying, continuing to bounce off the recent lows. The supply is only getting bigger, but demand is expected to remain strong. Conditions in Brazil generally look good, Argentina is expected to see a drier pattern, and a continuation of corn planting delays would likely lead to at least some increase in domestic soybean acres. In the first U.S. planting estimate of the season, 6% of beans are planted, compared to the five year average of 3%. The USDA’s attaché in Paraguay expects 2017/18 soybean acreage to be down 3% on the year, with production of 9.4 million tons. A lot of those lost acres are expected to go to a second corn crop. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly higher on commercial and technical buying. Forecasts have more planting delaying rain in some of the Midwest later this week and for parts of next week. There’s a chance of a freeze in the Northern Cornbelt as well, but any damage is expected to be minor. The USDA says that as of Sunday, 17% of corn is planted, compared to 6% a week ago and 18% typically for this time of year. Corn’s also expecting solid demand, despite record South American production and what could be another big U.S. crop. Nearly ethanol futures were mixed.

The wheat complex was lower on commercial and technical selling. Forecasts have more rain in U.S. winter wheat growing areas and the condition rating was expected to improve again this week. The USDA says 54% of winter wheat is rated good to excellent, unchanged on the week, but up 1% moving from good to excellent. 32% has emerged, compared to 23% on average. Spring wheat planting has been slowed down by precipitation and a freeze in the Northern Plains. As of Sunday, 22% is planted, compared to the five year average of 34%, and 5% has emerged, compared to 8% normally. The fundamental outlook is bearish, especially on the supply side of the ledger, cancelling out some of the buying interest at these relatively low prices. DTN says Israel is tendering for 45,000 tons of optional origin feed wheat. The USDA’s attaché in Morocco says 2017 wheat production should bounce back from a very dry 2016, but fall short of 2015.