Market News

Grains, oilseeds mostly lower, but up from lows

Soybeans were mostly lower. While the contracts that did lose ground were well above session lows, that overall move came despite the continued tight supply and solid demand. Cash basis levels are strong and more near-term planting delays are probable in some areas, but most of the region is expected to make solid progress. The USDA’s next set of supply, demand, and production numbers is out June 10^th. Soybean meal and oil were lower on commercial and technical selling. Sustained demand from China continues to be a question mark because of COVID lockdowns, which has already limited soybean oil consumption. Brazil’s ANEC sees April soybean exports at 11.28 million tons, a little bit less than last week. India’s government says it will allow duty free imports on 2 million tons each of soybean and sunflower oil over the next two years. The global supply of vegetable oils is generally tight and has been exacerbated by the drop in sunflower oil exports from Ukraine caused by Russia’s invasion. Indonesia is examining ensuring a domestic supply floor, which could have an impact on exports.

Corn was mostly lower, but much closer to the session highs than the lows. China has agreed to buy corn from Brazil, as long as it meets their standards, likely lessening demand for U.S. corn. China has become a leading customer for U.S. corn because of the absence of Ukraine from the market following Russia’s invasion. Brazil’s ANEC is projecting April corn exports at 1.24 million tons, slightly below a week ago. The USDA’s weekly U.S. numbers are out Thursday morning. Corn is also watching planting, along with domestic demand factors. The U.S. Energy Information Administration says ethanol production last week averaged 1.014 million barrels a day, up 23,000 on the week, but down 18,000 on the year, with stocks of 23.712 million barrels, a decrease of 79,000 from the previous week, but an increase of 4.732 million from a year ago.

The wheat complex was mixed, with Chicago and Kansas City down, but up from the session lows, and Minneapolis modestly higher. The trade is waiting to see if Russia makes any concessions to Ukraine on export movement. That remains to be seen and is probably unlikely given the scope of Moscow’s requests, but negotiations are reportedly ongoing. What exports are moving out of Ukraine right now are largely being transported by rail following damage to key ports by Russia. Russia is also reportedly stealing equipment and stored grain, along with general sabotage to infrastructure. Russia’s grain stocks have moved higher, due in part to sanctions. Rain is too late in much of the southern Plains to help hard red winter wheat and while parts of the eastern Midwest are excessively wet, soft red winter is in good condition. Planting is slow in the northern Plains, supporting Minneapolis. Spring wheat planting is also slower than normal in parts of Canada. India’s government says there are no immediate plans to lift a wheat export ban but will still complete previously agreed upon deals. The Rosario Grain Exchange says that with planting underway, farmers in Argentina have forward contracted 8.2 million tons of wheat for the current marketing year, nearly quadruple the total from this time last year.