Market News

Grains, oilseeds extend rally

Soybeans were sharply higher on commercial and technical buying. Contracts continued to follow the lead of the global vegetable oils market. The near-term U.S. soybean supply remains tight, while harvest is ongoing in Argentina and Brazil. The NOPA’s March member crush is out Thursday, with an average guess of 179.2 million bushels, compared to 155.16 million in February. There’s more talk some crushers will need to import soybeans, likely from South America, to meet domestic demand. Brazil’s state export group ANEC estimates April soybean exports at 14 million to 17.149 million tons, compared to the April 2020 total of 14.279 million tons. If the number falls towards the low end of expectations, ANEC says that will be because of a lack of available cargo space. ANEC has April soybean meal exports at 1.858 million tons. The USDA’s attaché in Paraguay projects 2020/21 production at 9.9 million tons because of lower second crop planted area due to first crop harvest delays, rising to 10.5 million in 2021/22. Soybean meal and oil were higher on commercial buying, with bean oil in the lead.

Corn was solidly higher on commercial and technical buying. Most forecasts have only light rain in dry parts of Brazil, potentially stressing their critical second crop. Planting was delayed in some areas by slow soybean harvest activity earlier in the season, pushing activity past the optimal window. Corn is also looking at a tight domestic supply and strong cash prices, along with cooler temperatures slowing down planting and development. Brazil’s ANEC projects April corn exports at 22,000 tons. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 941,000 barrels a day, down 34,000 on the week, but up 371,000 on the year, during the early stages of the pandemic. Stocks fell 124,000 barrels from the previous week to 20.518 million, which was 6.951 million barrels below this time last year. The USDA’s next corn for ethanol use estimate is out May 12^th.

The wheat complex was sharply higher on commercial and technical buying. Most forecasts have mixed near-term precipitation in the U.S. Plains, possibly missing some of the drier areas. Coverage is generally expected to be better in southern and central areas, benefiting hard red winter, with lesser amounts in northern and northwestern portions of the region, impacting spring wheat planting and development. Some soft red winter growing areas are too wet, with more rain in the forecast for parts of region later this week. Global conditions mostly look good, but there are concerns about damage in parts of the European Union following a recent cold snap. France’s AgriMer sees April soft wheat exports outside of the European Union at 7.55 million tons, compared to the prior guess of 7.45 million tons. There’s more talk about increased feed wheat demand because of high corn prices. The USDA last week unexpectedly lowered the domestic feed wheat usage guess but raised the global outlook because of strong demand by China, which is using wheat as a replacement for corn and bean meal in some feed rations. While China has sold a lot of wheat from state reserves recently, Beijing hiked its minimum price at auction in an effort to slow down those sales.