Market News

Soybeans up on oversold bounce

 

Soybeans were modestly higher on short covering and technical buying. Contracts bounced back a little, recovering a small part of the big losses on Monday. The trade continues to watch late development weather in Argentina, harvest activity in Brazil, and pre-planting conditions in the U.S. Parts of Argentina’s crop will be helped by the recent precipitation, but it was probably too little too late for some of their beans. In contrast, Brazil appears to be on pace for another very large, if not record, crop. That’d likely slow down U.S. soybean exports even further. Potential trade conflict with China would also probably have a significant impact. Soybean meal was higher and bean oil was lower on commercial spread adjustments.

Corn ended Tuesday’s session fractionally lower. It was an up and down day, with corn also watching conditions in South America and the U.S. ahead of the prospective planting report out on the 29th. Quarterly stocks numbers are also due on the last business day of the month. DTN says a private firm in Brazil reports 92% of the second crop of corn is planted in south-central growing areas, close to average. Peru bought 110,000 tons of 2017/18 U.S. corn. A little more than halfway through the marketing year, Peru is the third biggest buyer of U.S. corn in the Western Hemisphere. Ethanol futures were mixed. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Corn and the ethanol industry are waiting for any potential White House adjustments to renewable fuels policy.

The wheat complex was mixed, with Chicago steady to firm and Kansas City and Minneapolis modestly lower. Contracts were technically oversold and due for a bounce, but the overall fundamental outlook remains bearish. Recent rainfall in the southern Plains has helped, but most of the region remains in drought or near drought conditions as the hard red winter crop emerges from dormancy. Soft red winter is probably in better shape overall, even with the very wet conditions in parts of that growing region. Oman bought 90,000 tons of milling wheat from Russia. Jordan is tendering for 100,000 tons of optional origin milling wheat and Algeria is in the market for an unspecified amount of optional origin durum. Egypt’s government says the nation currently has a three-month strategic wheat reserve.