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Fundamental issues send soybeans lower

Soybeans were lower on fund and technical selling, ending the week sharply lower. The trade was watching harvest and development conditions in Argentina and Brazil. Contracts were up early but unable to follow through on those South American factors and general uncertainties about global demand on the continued spread of COVID-19. There was also some hangover from the marketing year low reported for export sales Thursday, which followed a cancellation by China, but also featured just a slow week for sales. The real lack of any improvement in demand from China continues to be a bearish factor. Soybean meal followed beans lower on that lack of follow through and bean oil was mixed, consolidating.

Corn was mixed on spread trade and short covering, also not following through on early gains, and finishing lower for the week. Corn was oversold after the move to new contract lows Thursday and South Korea bought 136,000 tons of 2019/20 U.S. corn Friday morning. Weekly corn export sales were strong, but there’s going to be a lot of competition from South America. Ukraine should also continue to be a player on the export market. Stateside, the trade is monitoring conditions in the Midwest ahead of widespread planting. The USDA’s prospective planting numbers are out on the 31st, along with quarterly stocks data. Ethanol futures were higher, despite the week’s drop in margins.

The wheat complex was mixed, with Chicago mostly weak and Kansas City and Minneapolis down modestly, cementing lower weekly finishes for the three pits. Wheat is also oversold but the global fundamental outlook is bearish, limiting any significant upside. The complex is watching winter wheat conditions as the crop comes out of dormancy, along with weather in the northern U.S. Plains ahead of widespread spring wheat planting. Even if contracts are oversold, wheat remains wary above price itself out of the export market, especially with gains in the dollar.

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