Market News

China rumors support soybeans

Soybeans were modestly higher on short covering and technical buying. The USDA confirmed Monday afternoon that development and harvest remain slower than normal for this time of year. Also, farmer selling is reportedly slow in many areas. China will reportedly offer tariff exemptions on 10 million tons of U.S. beans. Not a lot of details at this point, some of the recently rumored sales have not come to fruition, and there are basis signals that Beijing has resumed buying from Brazil. “Phase One” of the trade deal with China remains unsigned ahead of the high-level, face-to-face negotiations scheduled to resume next month. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The trade is also watching planting weather in South America.

Corn was steady to fractionally higher. The U.S. harvest pace is the slowest since 2009, with many producers focused on soybeans. Near-term, conditions generally look mixed for harvest activity, while next week could be wetter and colder in some key U.S. growing areas. Anecdotal yields around the Corn Belt have varied widely, as expected, following a tumultuous growing season for many producers. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Corn is also monitoring the planting and pre-planting conditions in Argentina and Brazil, especially the impact of slow soybean planting on Brazil’s second crop.

The wheat complex was mixed, mostly lower. The spring wheat harvest is behind average and what’s left is probably just feed quality, supporting Minneapolis. Some of the crop in the northern U.S. Plains probably won’t even be harvested, but activity has picked up steam in parts of Canada. Winter wheat planting and emergence are both on schedule, pressuring Chicago and Kansas City. Overall, the fundamental outlook for wheat remains neutral to bearish, with most of the negativity attached to the USDA’s projected record global supply. Production losses in Argentina and Australia have largely been canceled out by bigger crops for the European Union, Ukraine, and Russia.