Market News

Soybeans, corn up, but well below highs

Soybeans were modestly higher on speculative and technical buying but finished closer to the day’s highs than the lows. Most forecasts have more rain headed for already wet areas, further delaying planting, but some areas are expected to make progress ahead of that rain event. The continued corn and spring wheat planting delays have some private analysts anticipating an increase in U.S. soybean acreage. The trade is also waiting to see what happens in negotiations with China. No official meetings have been announced ahead of the next G20 summit in late June. The impact of African Swine Fever on soybean import demand continues to be a big question mark, with China’s Ag Ministry reporting a 22.3% drop in herd size from April 2018 to April 2019, following a 21% year to year decline in March. Soybean meal and oil were up, following beans, but also closed below session highs. The National Oilseed Processors Association says member firms crushed 159.990 million bushels of soybeans in April, less than expected, and down on the month and the year.

Corn was firm on speculative and technical buying, also ending the day closer to the session’s lows than the highs. Corn is also watching the weather and the increasing probability of some acres either being switched or going unplanted. Some private firms are already lowering acreage outlooks ahead of the next round of USDA projections. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production averaged 1.051 million barrels a day, matching the 2019 high set in January, and stocks were down 218,000 barrels at 22.25 million, the tightest supply since August 2018. The European Commission has decided to not renew anti-dumping penalties on European Union imports of U.S. ethanol. APK-Inform projects 2019 corn production for Ukraine at 33.075 million tons, compared to the 2018 record of 35.569 million, with new crop exports at 25.5 million tons, compared to the old crop guess of 26.8 million, reducing U.S. competition at least slightly.

The wheat complex was mostly lower with Kansas City and Minneapolis down on a lack of follow-through buying. Winter wheat is in good shape overall, but development is slower than normal, and the soft red winter crop is struggling with wet conditions, allowing nearby Chicago to hold fractional gains. While the fundamental outlook is bearish, there’s another year of dry weather concerns for Australia. The USDA’s attaché in Australia has 2019/20 wheat production at 20 million tons, assuming better rainfall and a return to seasonal conditions. According to Australia’s Department of Agriculture and Water Resources, Canberra has approved wheat imports for the first time since 2007, this time, from Canada. Some of Australia’s traditional buyers in Asia are sourcing wheat from the Black Sea region. APK-Inform sees 2019 wheat production for Ukraine at 26.188 million tons, compared to 24.586 million last year, with exports of 16.2 million tons, compared to 15.7 million a year ago. DTN says Jordan is tendering for 120,000 tons of optional origin milling wheat and Tunisia is in the market for 75,000 tons of soft wheat.