Market News

Soybeans, corn, wheat close solidly higher

Soybeans were higher on commercial and technical buying, still ending the week sharply lower. Soybeans are heavily oversold, bouncing off the recent one-year lows. Soybean meal and oil also saw solid oversold bounce, coming back from their recent lows. The losses in bean oil had been despite bullish demand expectations tied to biofuels. U.S. crush margins remain in positive territory but have narrowed recently. Ahead of widespread planting Allendale projects U.S. planted area at 87.768 million acres while Farm Futures has planted area at 89.620 million, both of which would be up on the year. Brazil’s basis is down with a lack of storage space for the record crop, giving them an even bigger export advantage. That’ll probably continue to limit global demand for U.S. soybeans the rest of the marketing year. The USDA’s next set of supply and demand estimates is out April 11^th.

Corn was higher on commercial and technical buying, ending the week mixed, with gains in the nearby contracts and losses in deferred months. China bought another 204,000 tons of U.S. corn Friday, the eighth sale in nine business days, for a running total of 2.752 million tons. Conditions look wet and cool ahead in much of the Midwest ahead of widespread planting with the USDA’s prospective planting report out Friday, March 31^st. Allendale expects U.S. planted area to be 90.414 million acres, above 2022, while Farm Futures is projecting 87.677 million acres, which would be down on the year. The trade is also monitoring the late stages of second crop planting in Brazil and the dire conditions in Argentina. There is some rain in the forecast for parts of Argentina, but it’s too late to really help.

The wheat complex was sharply higher on commercial and technical buying, with nearby contracts ending the week mixed, higher in Kansas City, sharply lower in Chicago, and weak in Minneapolis. Extreme drought continues to be the big issue in most of the southwestern U.S. Plains, likely sending hard red winter yields lower while increasing the rate of abandonment in parts of the region. Soft red winter wheat is in comparatively better conditions, maybe a little wet in some areas, and spring wheat planting delays are likely in parts of the northern U.S. Plains and Canada. Stateside, Farm Futures has all wheat acres at 47.744 million acres, including 34.417 million acres of winter wheat and 10.152 million acres of spring wheat, while Allendale sees all wheat at 48.706 million acres, with winter wheat at 36.524 million acres and spring wheat at 10.607 million acres. A big part of Friday’s gains were rumors about Russia stopping wheat exports, which were denied by Moscow. Russia is planning to prop up export prices to ensure the returns are enough to support the cost of production and is considering buying 10 million tons of grain to hold in reserve. Russia and Ukraine currently hold most of the export market share but are expected to see lower production this year. U.S. wheat stocks are the tightest in years, with quarterly supply numbers out on the 31^st.