Market News

Corn up on export sale to China

Soybeans were lower on profit taking and technical selling. Soybeans continue to wait for the upcoming talks with China after another week of conflicting signals from both sides. Cabinet-level trade meetings are scheduled for next week. Chinese purchases of U.S. soybeans have improved but haven’t come anywhere close to the rumored amounts, and possible soybean meal demand could be dented by the spread of African Swine Fever. The trade is also watching weather in South America, which, aside from scattered dry conditions in parts of Argentina, generally look favorable. Beans are also waiting to see what happens with U.S. planting and how many acres could be switched to beans from corn or spring wheat, along with the impact on cash movement. Allendale projects acreage at 84.263 million and Farm Futures has planted area at 85.9 million. Soybean meal and oil followed beans lower.

Corn was modestly higher on fund and technical buying. China did buy 300,000 tons of 2018/19 U.S. corn, a relatively small amount, but still possibly a sign of more business to come. Rumored purchase amounts are around 20 million tons, the USDA’s most recent supply and demand report had 2018/19 imports by China at just 5 million tons, and while Beijing is expected to increase domestic ethanol production, demand could be limited by the spread of African Swine Fever. Corn continues to monitor probable planting delays in the Midwest and Plains and the potential loss of acreage to soybeans. NOAA’s 30 and 90-day outlooks for most of the Midwest are generally wet and cool. Allendale’s current projection in 91.475 million acres and Farm Futures pegs planted area at 90.9 million. Farm Futures sees sorghum acreage at 5.7 million. Ethanol futures were higher. According to reports, flooding in Iowa, Nebraska, and South Dakota has shut down about 13% of U.S. ethanol production capacity. In addition to corn, Beijing is reportedly interested in U.S. ethanol, DDGS, and sorghum.

The wheat complex was mostly lower. Flooding has likely impacted winter wheat in some areas and will probably lead to spring wheat planting delays, maybe even the loss of acreage, but the fundamental outlook remains bearish, pulling contracts down from the mostly firm trade for much of the session. USDA’s prospective planting report is out on the 29th, along with quarterly stocks, and new supply and demand estimates are due April 9th. Ahead of the planting estimates, Allendale sees all wheat at 47.414 million acres, with winter at 31.492 million, spring at 13.82 million acres, and durum at 2.102 million. Farm Futures has all wheat at 45.9 million, with winter wheat at 31.1 million acres, spring wheat at 12.6 million, and durum at 2.2 million acres. Allendale sales Russia sent a small amount of wheat to Algeria for testing in hopes import standards can be softened. Algeria is a big market for wheat from the European Union, especially France. DTN says Taiwan purchased 110,000 tons of U.S. milling wheat and South Korea bought 60,000 tons of feed wheat, “likely Black Sea” origin, while the Philippines is tendering for 60,000 tons of wheat, either feed or milling quality.