Market News

Modest midweek gains for soybeans

Soybeans were modestly higher on short covering and technical buying. Soybeans also had some help from the higher move in meal, which continues to respond to the solid domestic crush demand. Still, export demand for U.S. meal has slowed down, with the world’s largest exporter of soybean products, Argentina, producing a much larger crop this year. Soybean oil was mixed, adjusting spreads. The trade continues to monitor harvest activity in Argentina and Brazil. ANEC projects Brazil’s April 2024 soybean exports at 13.74 million tons, compared to last week’s guess of 12.73 million. The USDA’s weekly U.S. sales numbers are out Thursday morning. Stateside, planting remains in the early stages with most of the activity outside of the Midwest.

Corn was weak on fund and technical selling. There are more near-term planting delays in the forecast for parts of the Corn Belt ahead of a cooldown followed by warmer, mostly drier weather next week. That should allow for a speedy resumption to planting in areas that have seen recent delays and help the rest of the region get ahead of schedule. The long-term outlook for southern Brazil is dry, which could hamper second crop development. Brazil’s ANEC sees April 2024 corn exports at 26,728 tons, unchanged from a week ago. The USDA’s updated supply and demand numbers are out May 10^th and CONAB’s updated outlook for Brazil is set for May 14^th. Harvest activity is ongoing in Argentina. The U.S. Energy Information Administration says ethanol production last week was a 12-week low due to seasonal maintenance, averaging 983,000 barrels a day, a drop of 73,000 from the previous week and 41,000 from a year ago. Stocks were reported at 26.08 million barrels, 128,000 less than the week before, but 787,000 more than last year.

The wheat complex was lower on fund and technical selling. Rain forecasts for the Plains remain mixed into early May, with the potential for crop stress in some key U.S. hard red winter growing areas. Meanwhile, some U.S. soft red winter growing areas have excessive soil moisture. Parts of Australia, Russia, and Ukraine are also drier than ideal, while portions of western Europe are too wet. That said – any U.S. and world weather concerns are largely a background factor due to slow export demand for U.S. wheat. Russia and Ukraine largely remain in control of the export market. That’s due to favorable prices and despite phytosanitary certificate issues for a major Russian exporter and Ukraine backing out of talks to resume the Black Sea Grain Agreement. The ongoing war between Russia and Ukraine is having some impact on Ukraine’s trade and has led to projections for lower planted area this year. ANEC estimates Brazil’s April wheat exports at 110,592 tons, compared to 140,592 last week.