Market News

Grains, oilseeds all post gains

Soybeans were modestly higher on short covering and technical buying, rallying after May briefly fell below the $9 mark. More cabinet-level discussions between the U.S. and China are scheduled for next week, but the trade is taking a wait and see attitude. President Trump indicated Wednesday talks with China are “coming along nicely”, but tariffs could be left in place “for a substantial period of time”. USDA Secretary Sonny Perdue says a trade deal with China would include certain purchase commitments but didn’t offer specifics because of the ongoing negotiations. Beans are also watching conditions in South America. Parts of Argentina are a little dry, but Brazil, overall, looks good for late development and harvest. ABIOVE lowered its estimate for Brazil’s crop to 116.9 million tons. Soybean meal and oil were higher, following the lead of beans. The trade is also waiting to see how much of a delay there is in planting corn and spring wheat and how many acres could be switched to beans.

Corn was fractionally higher on short covering and technical buying, along with spillover from beans and wheat. Corn is also waiting to see what happens with China and watching weather in South America. Crop conditions for most of South America are non-threatening to favorable, likely setting the U.S. up for more export competition. Ukraine has also become a bigger export presence and is expected to expand acreage this year. The trade is monitoring probable planting delays in the Midwest and Plains. The USDA’s prospective planting numbers are out on the 29th, along with quarterly grain stocks. Ethanol futures were mixed, mostly firm. The U.S. Energy Information Administration says U.S. ethanol stocks hit a new record high last week at 24.412 million barrels, an increase of 681,000, while production averaged 1.004 million barrels a day, a dip of 1,000.

The wheat complex was higher on short covering and technical buying. Contracts were due for a bounce and a trade agreement between the U.S. and Brazil is a nominal positive. Brazil has okayed imports of 750,000 tons of U.S. wheat on a tariff-free basis, about 10% of their annual consumption. Brazil is the world’s fourth largest importer of wheat, sourcing most of their supplies from other Mercosur nations. The USDA’s weekly export sales report is out Thursday at 8:30 Eastern/7:30 Central. Minneapolis is watching probable spring wheat planting delays in the northern Plains. Taiwan is tendering for 110,000 tons of milling wheat. The trade is watching world weather, including dry conditions in parts of the southern European Union. Australia’s Bureau of Agricultural and Resource Economics projects 2019/20 production at 24.3 million tons, up from 2018/19, but that is dependent on timely rainfall.