Market News

Soybeans up, watching weather in South America

 

 

Soybeans were modestly higher on commercial and technical buying. Most forecasts have generally good weather for Brazil and hot and mostly dry conditions in Argentina over the next week. That’ll end up impacting late planting and development. It’s roughly early July for crops in the southern hemisphere with Australia’s Bureau of Meteorology reiterating La Nina conditions are expected to persist through their summer, or winter in the northern hemisphere. Strength from Tuesday into Wednesday in palm oil was also supportive. Bean oil hit new four week highs on that palm oil activity and meal followed. Canola futures were also higher. Weekly export sales will be released Friday, delayed by Monday’s holiday.

Corn was mostly fractionally lower on profit taking and technical selling, along with general consolidation after Tuesday’s firm finish. Contracts remain near last year’s lows, with any upside limited by the large available supply. Concerns about crop loss in South America are mostly balanced out by that supply bearishness. Also, if soybean acres are delayed or lower than expected, that’ll impact second corn crop acres. Some crop loss would likely lead to some increase in demand for U.S. corn, the question is how much. New supply and demand numbers are out on the 12th, along with the final 2017 production totals and quarterly grain stocks. Ethanol futures were lower. The weekly EIA numbers are delayed until Thursday.

The wheat complex was modestly higher on commercial and technical buying. Big portions of the Midwest and Plains have seen bitterly cold weather with little or no snow cover and drought or near drought conditions. The USDA’s winter wheat acreage estimate is also out on the 12th. The global supply and demand outlook remains bearish, but futures are neutral on concerns about winterkill. USDA’s Foreign Ag Services says the Comprehensive and Progressive Trans-Pacific Partnership between the European Union and Japan will probably mean even more export competition for U.S. wheat and wheat product exports, including pasta, flour, and food wheat. Japan imported 45% of its wheat in 2016 from the U.S. The FAS also says Tokyo is encouraging domestic wheat production via trade countermeasures. Egypt’s Ministry of Agriculture recent approved ergot levels of 0.05% or lower in wheat imports. Egypt is the world’s biggest wheat importer.