Market News

Commercial demand, exports support soybeans

 

Soybeans were higher on commercial and technical buying. Combined old and new crop export sales topped 90 million bushels and shipments were good. Next week’s report is also expected to be bullish. Supplies in Brazil are have reportedly tightened and their prices have moved higher, which could mean more U.S. business in the coming weeks. According to wire reports, in addition to Argentina’s purchases of U.S. soybeans this week, last week, they picked up 120,000 tons of beans from Brazil. Traders continue to watch late development conditions and harvest activity in South America, while keeping an eye on the early U.S. corn planting delays. Soybean meal and oil were supported by commercial and technical buying.

Corn was modestly higher on commercial and technical buying. Many forecasts have more snow and rain along with cooler temperatures this weekend in parts of the Cornbelt. It’s still early, but if those cooler temperatures continue, early development will be hampered, and some acres could be either switched to another crop, or just not planted. More than halfway through the 2017/18 marketing year, weekly export numbers for corn were neutral. The large domestic supply will continue, at least for now, to limit the upside. The USDA’s attaché in Brazil estimates 2017/18 corn production at 89 million tons, combined first and second crop, with 2018/19 production at 90 million tons, anticipating increased second crop acreage. Ethanol futures were higher on the possibility of year-round E-15 availability.

The wheat complex was lower on commercial and technical selling, with Kansas City leading the way down. Some near-term forecasts have rain in Kansas and world crop conditions generally look good. After that, most of the southwestern Plains are expected to see a return to dry conditions, while the northern U.S. Plains and Canada may see more spring wheat planting delays and the Delta and eastern Midwest will have to contend with another round of cooler, wet conditions. With about a month and a half left in the marketing year, weekly export numbers were bearish, and so are the fundamentals. Japan bought 68,060 tons of U.S. food wheat, along with 34,883 tons from Canada and 25,660 tons from Australia. South Korea is tendering for 65,000 tons of U.S. wheat and Jordan is in the market for 50,000 tons of optional origin wheat.