Market News

Soybeans up on continued commercial support

 

Soybeans were modestly higher on commercial and technical buying. Forecasts for Argentina and parts of southern Brazil generally remain dry, while the trade expects another big total crop out of Brazil, with the harvest pace close to average. The Buenos Aires Grain Exchange lowered its estimate for Argentina by 3 million tons to 50 million. Beans were up on the week, with nearby contracts outgaining deferred months, reflecting the current commercial situation. Weekly export sales were a new marketing year low. Unknown destinations bought 106,000 tons of U.S. soybeans, 40,000 for delivery this marketing year and 66,000 tons for next marketing year. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The USDA’s early estimate for 2018/19 U.S. soybean ending stocks is 460 million bushels.

Corn was steady to fractionally lower on light profit taking, with a very narrowly mixed finish for the week. Corn was also watching weather in South America, with more probable yield loss in parts of Argentina and southern Brazil. The trade also has an eye on second crop planting in central Brazil. The Buenos Aires Grain Exchange now sees Argentina’s crop at 37 million tons, down 2 million from the previous projection. Egypt bought 115,000 tons of 2017/18 U.S. corn, but while weekly sales were larger than expected, the overall pace remains slow. Ethanol futures were lower. From the Ag Outlook Forum, the USDA’s early 2018/19 U.S. ending stocks projection is 2.27 billion bushels. The CBOT has issued force majeure on the Illinois River because of recent flooding.

The wheat complex was mixed, with Chicago steady to firm and Kansas City and Minneapolis weak. Weather continues to be an area of concern, but weekly export numbers were bearish and so is the fundamental outlook, limiting any upside. The trade is also keeping an eye on the lack of snow cover in the Black Sea region. Week to week, March contracts at three major pits posted losses. The USDA’s initial 2018/19 U.S. ending stocks estimate is 931 million bushels. The new marketing year for wheat gets underway June 1st. Tunisia bought 75,000 tons of optional origin soft wheat, while issuing a tender for 50,000 tons of optional origin durum. Jordan is in the market for 100,000 tons of optional origin milling wheat.