Market News

Fundamentals pressure soybeans

Soybeans were lower on commercial and technical selling. Beans continue to grapple with China’s proposed 25% import tariff and its impact on export demand and the domestic supply, even as Brazil’s supplies get tighter and their prices move higher. Still, South America can’t meet all of China’s expected soybean and product import needs, so Beijing will probably have to buy U.S. beans eventually. Ukraine and a handful of other nations could make up at least a portion of the shortfall. Soybean meal and oil followed beans lower. As of Sunday, the USDA says 2% of beans are planted, matching the five-year average. According to AgRural, 91% of Brazil’s soybean crop is harvested, a little slower than last year, but a little faster than normal.

Corn was modestly higher on commercial and technical buying. Contracts basically just saw a bounce off the recent lows, remaining mindful of the large domestic supply and neutral to bearish export demand. There’s still snow on the ground in parts of the northern Cornbelt, but most of the rest of the region should see warmer temperatures and soil moisture levels are good. The USDA says 5% of corn is planted, compared to 15% a year ago and 14% on average. Ethanol futures were lower. The trade’s also monitoring a drier pattern for Brazil’s second corn crop, the larger of the two and the source of most of their exports.

The wheat complex was mostly lower, with Minneapolis leading the way. Last week’s precipitation in the southwestern Plains was scattered and may have helped winter wheat a little, and while it wasn’t enough to break the drought, the overall fundamental outlook remains bearish, limiting the upside, with new supply and demand numbers out May 10th. The USDA reports 31% of winter wheat is rated good to excellent, unchanged on the week, but 23% less than last year, and 13% has headed, compared to the usual pace of 19%. Minneapolis expects a faster spring planting pace, alleviating some of the concerns about early delays. As of Sunday, just 3% of spring wheat is planted, compared to 25% on average. The USDA’s attaché for Kazakhstan estimates 2018/19 wheat production at 14 million tons, down 800,000 from 2017/18 on lower planted area, with exports of 8 million tons, essentially unchanged on the year.