Market News

Soybeans down on profit taking, acreage questions

Soybeans were lower on profit taking and technical selling, giving back most of Monday’s gains. Corn and spring wheat planting delays are expected to lead to an increase in bean acres, questions about China continue to linger in the background, and trade aid package rumors include soybeans. As of Sunday, 19% of soybeans are planted, much slower than normal, with more rain in the forecast this week. China remains a big factor for two reasons: questions about the impact of African Swine Fever on demand and a lack of any public progress in trade talks or any apparent negotiations between the world’s two largest economies until late June. Soybean meal and oil were lower, following beans.

Corn was modestly higher on short covering and technical buying, continuing the rally, but closing in the middle of the day’s range. 49% of corn is planted, compared to 80% on average, with big delays in several key states and more in the forecast. At this point, assuming the historically slow planting pace continues, the trade expects a lower yield and at least some loss in acreage, either from fields being washed out or producers switching to soybeans. The trade is also watching barge interior barge movement, with the probability of water levels rising into early June. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was mixed, peeling back from the day’s highs, with Chicago and Minneapolis mostly weak and Kansas City up modestly. Winter wheat is in great shape, but soft red winter growing areas are wetter than normal, and storms could damage hard red winter, while spring wheat planting remains slower than average. Also, winter wheat is developing slower than normal. Still, the fundamentals are bearish, with the end of the marketing year coming up fast. The trade is also watching to see what role wheat plays in the next round of proposed trade aid. DTN confirmed the sale of 600,000 tons of milling wheat to Ethiopia. Japan is tendering for 122,844 tons of food wheat from the U.S. and Canada.