Market News

Planting concerns propel grains and oilseeds

Soybeans were sharply higher on speculative and technical buying. It was another wet weekend in many key U.S. growing areas with more rain on the way, possibly into mid-June, further delaying planting. The USDA says 29% of U.S. soybeans are planted, compared to the five-year average of 66%, and 11% has emerged, compared to 35% on average. The uncertainties about China, both trade talks and African Swine Fever, are expected to limit switching of acreage from corn to beans. China’s General Administration of Customs says Beijing imported 1.75 million tons of beans from the U.S. in April, up 16% on the month, but about 6 million tons still await shipping. China was the leading destination for beans in the USDA’s weekly export inspections report, but the pace remains bearish. Soybean meal was sharply higher, following beans, and bean oil was up as well.

Corn was sharply higher on speculative and technical buying. Corn is also watching the weather, expecting the USDA’s weekly planting pace estimate to be much slower than normal. That’s leading to more talk of lower acreage, maybe 5 million less than the prospective planting report, along with lower yields. Either way, a significant chunk of acreage could end up in prevent plant. As of Sunday, 58% of corn is planted, compared to 90% normally, with 32% emerged, compared to the usual pace of 69%. Ethanol futures were higher. Weekly export inspections were neutral to a little bearish, with increased competition from South America and continued disruption of interior domestic movement by high river levels.

The wheat complex was sharply higher on speculative and technical buying. Recent weather has likely damaged winter wheat and spring wheat planting continues to be slower than normal. For winter wheat, 61% of the crop is rated good to excellent, down 5% on the week, and 66% has headed, compared to 76% on average. For spring wheat, 84% is planted, compared to 91% typically this time of year, and 47% has emerged, compared to 69% on average. There are also concerns about dry weather in the Canadian Prairies, the Black Sea region, and Australia. DTN says South Korea bought 120,000 tons of feed wheat, “likely” Black Sea origin. Weekly export inspections were neutral, with the 2018/19 marketing year for wheat ending Friday. The European Commission raised its wheat production outlook for the European Union by 2.5 million tons to 143.8 million.