Market News

Soybeans up on commercial support, higher meal

 

Soybeans were higher on commercial and technical buying. Beans saw a bounce off the recent lows, with help from bean meal, but they remain concerned about Chinese demand. China bought significantly more soybeans from Brazil than the U.S. during the first quarter of 2018, with the lowest March number for the U.S. in a decade. That demand has tightened Brazil’s supply and pushed prices higher. The USDA’s attaché in Brazil projects 2018/19 production at 115 million tons, with an increase in acreage and exports of 67 million tons. Brazil’s domestic crush is expected to climb to a record of 44 million tons. Safras e Mercado currently pegs Brazil’s crop at 119.2 million tons, above most other estimates. Still, South America won’t be able to meet all of China’s soybean import needs. Beans are also watching the corn planting pace and the potential for an acreage shift. Soybean meal was higher and bean oil was lower on commercial product spread adjustments.

Corn was higher on fund and technical buying. Most forecasts have warmer weather in key U.S. growing areas, with generally good planting conditions in much of the region. Next week’s USDA crop progress and condition numbers are expected to show a faster U.S. planting pace. Domestic demand is good, but exports are slow and there’s a lot of corn available, with new supply and demand numbers out on May 10th. Ethanol futures were firm. The U.S. Energy Information Administration says ethanol production was down on the week, while stocks climbed. Dry weather and a late start to planting in Brazil could impact their second crop, the larger of the two and the source of most of their exports.

The wheat complex was higher on commercial and technical buying. Parts of the southwestern Plains are expected to see scattered rainfall ahead of another drier pattern, probably causing at least some further damage to hard red winter. Parts of the northern U.S. Plains and Canada are expected to see more spring wheat planting delays. A major winter wheat crop tour gets underway next week and Statistics Canada’s new acreage numbers are out Friday. Taiwan bought 92,975 tons of U.S. milling wheat and South Korea purchased 100,000 tons of feed wheat from an unnamed source. Algeria is tendering for an unspecified amount of optional origin milling wheat.