Market News

Soybeans see more light commercial support

Soybeans were modestly higher on commercial and technical buying. Nearly 80% of Brazil’s soybean crop is harvested, a little slower than average, while heavy rain is in the forecast for parts of Argentina, delaying early harvest activity. The USDA’s updated South American production projections are out Friday in the monthly supply and demand report. Demand for U.S. beans has tailed off as Brazil’s harvest has moved forward, but sales and shipments will still very likely meet or exceed USDA projections for the current marketing year and domestic demand is good. The near-term supply remains tight and soybean oil was up, following the lead of palm oil futures. The head of Egypt’s supply ministry says Cairo has 3.7 months of vegetable oils in strategic reserves. Soybean meal was mixed, adjusting spreads.  Stateside, the trade is watching conditions ahead of appreciable soybean planting.

Corn was mostly modestly lower on old crop/new crop spread activity. Traders unwound the spreads put in place Monday, watching second crop development conditions in Brazil, with the potential for reduced yields for later planted crops, and harvest activity in Argentina, which is slightly slower than average. 65% of Brazil’s first crop is harvested, in-line with the average. The USDA 2% of the U.S. corn crop is planted as of Sunday, matching both the year ago pace and five-year average. Some areas will see planting delays over the next week, but the soil moisture should generally be beneficial. China reportedly released 2 million tons of rice from state reserves to replace some much-higher priced corn in feed rations. There’s been talk, but no confirmation, of China buying U.S. corn recently. Ethanol futures were steady. The U.S. Energy Information Administration’s weekly ethanol supply and production numbers are out Wednesday.

The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis up. 53% of U.S. winter wheat is rated good to excellent, 7% more than in November, but 9% less than the first rating a year ago, with dry conditions a factor in many areas. 3% has emerged, compared to the usual pace of 3%. The northern U.S. Plains and parts of Canada will need more precipitation ahead of widespread spring wheat planting, supporting Minneapolis. 3% of the U.S. spring crop is planted, compared to 2% normally. Global crop conditions generally look good and the supply fundamentals are bearish. The head of Egypt’s supply ministry says it has 3.6 months of wheat on hand and wants to buy 4 million tons of local wheat this season. DTN says Ethiopia has two open tenders for milling wheat, one for 400,000 tons and one for 30,000 tons, while Algeria is in the market for an unspecified amount of milling wheat and Taiwan is tendering for 96,485 tons of U.S. milling wheat.