Market News

Soybeans firm on spillover from products

 

Soybeans were firm on commercial and technical buying, moving back into positive territory late in the session thanks to soybean products. Argentina has lost some production potential, but Brazil is apparently harvesting a large, if not record, crop. The trade is also watching for potential trade retaliation from China. Industry consensus seems to be Brazil will pick up a lot of Argentina’s lost soybean business, especially if Beijing decides to take action against U.S. tariffs. The USDA’s attaché in China projects 2017/18 soybean imports at 89 million tons. Soybean and oil were supported by commercial demand. Bean oil had additional support from the strength in crude oil and possible demand increase from India because of a palm oil import tax. Weekly export sales are out Thursday at 8:30 Eastern/7:30 Central.

Corn was mixed, mostly fractionally lower. Contracts put in another relatively quiet low volume session, watching the drought impact in Argentina and the good second crop planting pace in Brazil. The trade is also keeping an eye on U.S. conditions ahead of widespread planting. The USDA’s prospective planting report is out March 29th, along with new quarterly stocks data. Ethanol futures were higher. The U.S. Energy Information Administration says domestic ethanol production was up on the week, while stocks backed off from the recent record high. Corn and ethanol are waiting for any new developments from the White House on renewable fuel policy. South Korea bought 138,000 tons of 2017/18 U.S. corn.

The wheat complex was narrowly mixed, with May Kansas City and Minneapolis notching new multi-month lows. Chicago was firm, pulled up by late support from short covering and the weak dollar, along with wet weather concerns in the eastern Midwest, while Kansas City and Minneapolis were down on technical selling. Nothing’s really changed weather-wise for wheat in the southern U.S. Plains, except for an improved chance of rain in some areas that could still see a benefit, but the overall fundamental outlook remains bearish. World conditions generally look good, with new USDA supply and demand estimates out April 10th. Minneapolis is watching weather in the northern U.S. Plains and Canada ahead of spring wheat planting. Russia’s Ag Ministry says 2017/18 grain exports could be 52 million to 53 million tons.