Market News

Soybeans, corn up ahead of China talks

Soybeans were modestly higher on short covering and technical buying. The trade is waiting for Thursday’s scheduled Cabinet-level trade talks between the U.S. and China. China has been buying U.S. beans, but not as much as anticipated, and African Swine Fever continues to spread and will likely lower demand for beans and meal. Information technology continues to be a sticking point in negotiations. Beans are also watching weather in South America and waiting to see what happens with U.S. planting and any potential shift away from corn and spring wheat to beans. Safras e Mercado says 68% of Brazil’s crop is harvested and while parts of Argentina are dry, it’s manageable for now. Soybean meal and oil were up, following beans.

Corn was modestly higher on short covering and technical buying. Corn is also waiting for China, watching South America, and getting ready for widespread U.S. planting. Early expectations are for at least some delay in planting because of the very wet conditions in much of the Midwest and Plains, possibly even the loss of acreage to beans. Ethanol futures were mostly firm. Reportedly, 13% of U.S. ethanol production capacity has been either idled or limited by flooding. There’s been more talk of China buying U.S. corn, but nothing since last week. Beijing is reportedly also interested in U.S. ethanol, DDGS, and sorghum. Weekly export inspections were neutral.

The wheat complex was mixed, with Chicago and Kansas City up modestly and Minneapolis mostly weak. Flooding has had an impact on some winter wheat growing areas and is expected to delay spring wheat planting. The USDA’s prospective planting and quarterly stocks numbers are out Friday at Noon Eastern/11 Central. DTN says Bangladesh is tendering for 50,000 tons of milling wheat. Wheat is also waiting to see what happens with China but considering that nation holds about half of the world’s wheat supply, anything more than a nominal, good faith purchase of U.S. wheat is questionable. Weekly export inspections were bearish, with less than a quarter left in 2018/19. The USDA’s next set of supply and demand estimates is out April 9th.