Market News

Weather concerns support corn

Soybeans were modestly higher on short covering and technical buying. There’s more optimism about trade talks with China, but not a lot of publicly available details. Treasury Secretary Steven Mnuchin says enforceability issues are “nearly settled”, so a deal might be close. Trade talks with Japan get underway this week. Unknown destinations bought 140,000 tons of old crop U.S. beans, a routine amount, and weekly export inspections were bearish. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The National Oilseed Processors Association says member firms crushed 170.011 million bushels of soybeans during March, above expectations, but down slightly on the year. According to AgRural, 88% of Brazil’s soybean crop is harvested, compared to 85% both last year and for the five-year average.

Corn was modestly higher on short covering and technical buying. The USDA’s planting guess was expected to be close to average, but most forecasts have more wet weather in some key U.S. growing areas following what was another wet, cool weekend from the Upper Midwest to the Delta. As of Sunday, the USDA says 3% of U.S. corn is harvested, compared to 3% a year ago and the five-year average of 5%. Corn is also waiting to see what happens with China, Japan, and the USMCA. Weekly export inspections continue to slow down with the 2018/19 marketing year more than halfway complete. Ethanol futures were steady to firm. U.S. ethanol, DDGS, and sorghum are also potential purchase targets for trading partners. Sorghum export inspections were also bearish. Turkey is tendering for up to 300,000 tons of corn.

The wheat complex was mostly lower. Chicago and Kansas City were down ahead of the USDA’s updated winter wheat crop condition rating. Conditions are generally better for hard red winter than soft red winter. Minneapolis tried to rally on expectations for a slow spring wheat planting pace but couldn’t follow through. Part of that is an expected increase in spring wheat planting for Canada. For winter wheat, 60% of the crop is rated good to excellent, steady with last week and up 29% from this time last year, and 6% of the crop has headed, compared to 9% on average. For spring wheat, 2% of the crop is planted, compared to 13% on average. Weekly export inspections were bearish, with about a month and a half left in the marketing year. Egypt bought 240,000 tons of milling wheat, 180,000 tons from Romania and 60,000 tons from Ukraine. U.S. wheat had the lowest FOB price, but high ocean freight rates continue to limit competitiveness. SovEcon has Russia’s 2019 wheat crop at 83.4 million tons. Many forecasts have improved near-term rainfall for dry parts of the European Union and Ukraine.