Market News

Soybeans, corn, wheat unable to extend early gains

Soybeans were lower on fund and technical selling. More than 60% of Brazil’s expected record crop is harvested, while rain in Argentina is likely too late to help that much. Agroconsult pegs Brazil’s crop at 155 million tons, up 2 million from their prior guess, while estimating exports at an all-time high of 96 million tons. CONAB’s updated outlook for Brazil is out April 13^th, with the USDA’s new supply and demand estimates scheduled for April 11^th. Contracts were up early, but unable to follow through, bouncing between support and resistance. The USDA’s attaché in China projects 2023/24 soybean imports at 97 million tons on expectations for increased livestock feed demand. The office did not breakdown the expected sources of those exports. Soybean meal was mixed, adjusting spreads. Soybean oil was down sharply on fuel demand uncertainties connected to the broader economy. The USDA’s attaché in Indonesia estimates 2023/24 palm oil production at 46 million tons, which would be up 3% from 2022/23 on better yields. Informa Economics pegs 2023 U.S. acreage at 88.2 million acres.

Corn was lower on fund and technical selling. China bought 136,000 tons of 2022/23 U.S. corn, their fifth purchase of U.S. corn in the last six business days. That brings the running total for this recent spike in demand to 2.247 million tons. China was nearly totally absent from the U.S. corn market during the first half of the marketing year, relying in Brazil and Ukraine, both of which are now very short of supplies. That shortness in Brazil will only last a few months, while production is expected to fall again in Ukraine this year due to the continued aggression from Russia. There’s more rain in the forecast for the Corn Belt, delaying fieldwork in some areas, but still potentially helping to set up a good start to the growing season. Planting is underway in some southern and southeastern growing areas. Informa Economics sees U.S. planted area this year at 90.9 million acres, with the prospective planting, and quarterly stocks numbers, out on the 31^st. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Broader economic questions were also a factor, with the Federal Reserve expected to raise rates this week.

The wheat complex was lower on fund and technical selling. The Black Sea Grain Initiative has been extended, Russia says only for 60-days, while everyone else involved says the extension is 120-days. For now, Russia and Ukraine, along with the European Union and Australia, continue to dominate the export market. Even when U.S. prices are competitive, that’s nullified by freight costs. Crop conditions did improve in parts of the southwestern Plains over the past week, but the hard red winter crop remains in generally dismal shape with concerns about yields and expectations for a higher rate of abandonment. Soft red winter conditions are comparatively good and there is the possibility of some early spring wheat planting delays in parts of the northern U.S. Plains and Canada. Informa Economics sees 2023 U.S. planted area for all types of wheat at 49.427 million acres. India’s wheat crop has been reportedly damaged by hail and heavy out of season rainfall.