Market News

Weather woes provide more support in grains, oilseeds

 

Soybeans were higher on commercial and speculative buying, with May notching another new contract high. Large parts of Argentina remain dry, further reducing yield potential, while Brazil is expected to make solid harvest progress most of this week. The USDA’s next set of supply and demand estimates, including new South American production projections is out on the 8th. Most analysts expect a smaller estimate for Argentina and a steady to larger projection for Brazil. Soybean meal was mostly higher, the exception was the lightly traded March, and bean oil was modestly lower on the adjustment of product spreads.

Corn was modestly higher on commercial and speculative buying, holding near the more than six month highs. Corn’s also watching weather in South America, along with conditions ahead of widespread U.S. planting. The USDA expects planted area to be about 90 million acres, with prospective planting numbers out at the end of the month, along with updated quarterly stocks. A big question for Brazil right now is just how many second crop corn acres will be planted. Brazil’s second crop is the larger of the two and the primary source of their exports. Ethanol futures were steady to higher. Allendale says cash bids were down last week on increased movement and continued loading delays.

The wheat complex was higher on commercial and speculative buying. Chicago’s focused on forecasts for more rain in the eastern Midwest, while Kansas City is supported by drought in the southwestern Plains. High winds in Kansas and Oklahoma have led to red flag warnings. Timely rainfall would help, but it may be too little, too late for part of the hard red winter crop. Minneapolis is also watching weather ahead of spring planting in the northern U.S. Plains and Canada. Jordan is tendering for 100,000 tons of optional origin milling wheat. Wheat ending stocks Thursday could be just about unchanged from February. The USDA’s weekly export sales report is also out on the 8th.