Market News

Profit taking pushes grains, oilseeds lower

Soybeans were lower on profit taking and technical selling. Beans saw a correction, even with more planting delaying rain in the forecast for some key U.S. growing areas, especially in the central and eastern Midwest. Planting is more than ¾ of the way complete, but the actual acreage remains a big question mark because of the delays and the anticipated switch away from corn to soybeans. The USDA’s acreage report is out on the 28^th, but that should be disregarded quickly given the planting issues. The trade is also getting ready for next week’s G20 meeting, anticipating, for now, at least some face-to-face discussions between the U.S. and China. U.S. beans are priced below South American supplies, but China’s tariff is limiting demand. Agroconsult projects Brazil’s new crop exports at 70.5 million tons, up 3.5 million from their prior estimate. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was lower on profit taking and technical selling. Corn continued its correction after the recent gains, while watching the tail end of planting and development conditions. The crop is in worse shape than this time last year and Monday’s weekly numbers did include at least some prevent plant acres. The weather rally has priced U.S. corn above most competing exporters, with weekly export numbers out Thursday morning and less than a quarter left in the 2018/19 marketing year for corn. Demand rationing is also a factor ahead of the USDA’s quarterly grain stocks numbers on the 28^th. Cash basis levels continue to surge in the eastern Midwest and while some river activity has been restored, there are still concerns about interior movement in some areas. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.081 million barrels a day, down 15,000 on the week, with stocks of 21.613 million barrels, a decline of 189,000. China’s Ministry of Commerce says it is keeping tariffs on U.S. DDGS in place. U.S. ethanol and sorghum are also potential purchase targets for Beijing.

The wheat complex was lower on profit taking and technical selling. Winter wheat harvest activity remains slow, with more near-term rain in parts of Kansas and Oklahoma. Next week’s forecast generally looks better. Increased feed wheat demand is likely because of lower protein content and corn rationing. Spring wheat planting is near the finish line and the crop is in very good condition. The trade is watching weather in Australia, Canada, Russia, and Ukraine. DTN says Japan is tendering for 61,864 tons of food wheat, Egypt is in the market for an unspecified amount of wheat, and South Korea has tendered for 130,000 tons of feed wheat, and South Korea also purchased 60,000 tons of feed wheat “likely” from the Black Sea region.