Market News

Soybeans, corn up, watching weather, waiting for China

Soybeans were modestly higher on short covering and technical buying. The trade is getting ready for next week’s cabinet-level discussions with China and still taking somewhat of a wait and see attitude. China has pledged to buy a lot of U.S. beans and while sales haven’t materialized, it’s a factor in the background, but so is President Trump saying tariffs could remain on imports from China for a “substantial period of time”. The continued spread of African Swine Fever is a question mark for soybean and bean meal demand and intellectual property issues continue to be a sticking point in trade talks. Weekly export numbers were bearish, with China buying a routine amount of old crop U.S. beans and cancelling some new crop. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Beans are also watching U.S. conditions ahead of widespread planting, waiting to see if there’s a significant switch away from corn and spring wheat to beans. Development and harvest conditions look good for most of Argentina and Brazil.

Corn was modestly higher on short covering and technical buying. Corn is also waiting to see what happens with China and monitoring probable U.S. planting delays. NOAA’s updated 30 and 90-day outlooks are generally wetter and cooler than normal. Widespread planting is still a little bit off, at least for the Midwest and Plains, but the flooding has also disrupted grain movement and transportation on waterways, supporting FOB prices at New Orleans. Several rail lines in the Midwest are also being impacted by the flooding. Weekly export numbers were neutral to bearish. Ethanol futures were higher. In addition to U.S. corn, China is reportedly interested in ethanol, DDGS, and sorghum. Crop conditions look good for most of South America. Ukraine’s Ag Ministry says exports last week were a one-month high at 1.3 million tons, 1.13 million of that corn, with sales now 64% ahead of last year’s pace. Ukraine’s wheat and barley sales trail the previous marketing year.

The wheat complex was mostly modestly higher, with Chicago and Kansas City up and Minneapolis mostly firm. Weekly export numbers were bearish and with less than a quarter left in the marketing year, it looks like sales won’t meet USDA expectations. Spring wheat planting delays are also probable, with the USDA’s acreage estimates out on the 29th. Quarterly grain stocks numbers are also out on the 29th. Flooding has also likely impacted winter wheat in Nebraska, with the USDA’s first national condition rating of the season out April 1st. Globally, aside from dry weather in parts of Australia and Canada, conditions look favorable. Australia’s Bureau of Meteorology has increased the likelihood of an El Nino pattern in 2019 to 70%, roughly three times the usual chance. FC Stone projects Brazil’s 2019/20 wheat imports at 5.7 million tons, compared to 7 million in 2018/19, because of increased domestic production. Jordan is tendering for 120,000 tons of milling wheat.