Market News

Soybeans, wheat up, watching export competitors

Soybeans were modestly higher on commercial and technical buying. Early harvest is ongoing in Brazil, with relatively disappointing, but improving, yields, and about 6% of the crop harvested. Also, forecasts for parts of Brazil looks mixed, with uncertainties about rainfall coverage and totals. With harvest underway, Brazil’s bean prices are now below U.S. prices. Parts of Argentina are expected to see another round of wet weather, probably impacting production. The trade is also getting ready for next week’s Cabinet-level trade talks with China, while watching signals from China’s economy and the spread of African Swine Fever, which would impact import demand for beans. Soybean meal was mixed on spread adjustments and bean oil was up, following beans. Private firm IEG Vantage, formerly Informa Economics, project 2019 U.S. soybean planting at 86.204 million acres, up about 1 million on the month, but nearly 3 million less than in 2018.

Corn was mostly modestly higher on spread adjustments. Corn is also watching South America, especially the impact of hot, dry weather on Brazil’s second crop. That’s the larger of the two and the source of most of their exports. Second crop planting is ongoing as the first harvest gets underway and the soybean harvest advances. The upside is limited by increased export competition from Ukraine. Argentina could also make a solid return to the export market, with generally better growing conditions this year than last year. DTN says there are several open corn export tenders, including Iran, Japan, Mexico, and Malaysia, adding Taiwan picked up corn from Argentina, Indonesia bought corn from South America, and Turkey purchased optional origin corn. Ethanol futures were weak. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. Margins and uncertainties about year-round E15 implementation and improved export demand are currently issues for the ethanol industry. IEG Vantage estimates 2019 U.S. corn acreage at 91.504 million acres, less than in December, but almost 2.5 million above a year ago.

The wheat complex was modestly higher on commercial and technical buying, along with the weak U.S. Dollar index. The trade is watching Russia’s faster than normal export pace, their supplies, and Black Sea wheat prices. Ukraine’s exports are also moving out quickly, with APK-Inform, via Allendale, stating 83.2% of the planned volume of milling wheat exports have already been shipped. There’s more talk of new export demand for U.S. wheat, but no direct confirmation because of the shutdown. DTN says Japan is tendering for 102,057 tons of wheat from the U.S., Australia, and/or Canada, along with several other optional origin tenders. The trade is also monitoring U.S. winter wheat growing conditions, with more cold weather from the Delta to the northern Midwest and Plains. IEG Vantage has 2019 U.S. all wheat acreage at 47.163 million acres, compared to 47.8 million last year.