Market News

Soybeans bounce ahead of upcoming talks with China

Soybeans were higher on short covering and technical buying. Contracts saw a bounce, pulling the nearby months to a modestly higher finish for the week, optimistic about the upcoming trade talks with China. There are a lot of unknowns, including how much of the negotiations will be about ag trade, or even soybeans specifically, but any potential improvement in demand from the world’s biggest buyer of beans would be positive. China continues to largely rely on Brazil for its soybean needs due to prices and politics. Brazil’s trade ministry says April soybean exports were a record 16.747 million tons, up 9.7% on the year. Stateside, planting weather is expected to improve in the coming week. The Buenos Aires Grain Exchange says 34% of Argentina’s soybean crop is harvested. Soybean meal and oil futures were higher, also supported by short covering.

Corn was higher on short covering and technical buying, ending the week with modest losses. Traders are monitoring U.S. planting conditions, with more near-term rain delays ahead of a generally warmer, drier pattern into later this month. Corn is watching harvest in Argentina and second crop development weather in Brazil. The USDA will update their supply, demand, and production numbers on the 12^th, with CONAB’s new look at Brazil’s crops set for the 14^th. AgroConsult has Brazil’s second corn crop at 112.1 million tons, compared to 123.9 million last year due to late planting and weather issues, with total production pegged at 140.5 million tons, compared to 151 million a year ago. Brazil’s trade ministry says April corn exports were 474,000 tons, compared to 178,000 the year prior. The Buenos Aires Grain Exchange says 30% of Argentina’s corn crop is harvested.

The wheat complex was higher on short covering and technical buying, but not enough to avoid a steep week-to-week decline after a few days of volatility. The U.S. Drought Monitor shows 70% of U.S. winter wheat growing areas are in some stage of drought, most of that impacting the hard red winter crop. Dry weather is also a concern for spring wheat in parts of the Northern Plains. The USDA’s weekly national crop progress and condition report is out Monday afternoon. The trade is also monitoring development weather in Europe, Russia, and Ukraine, along with planting in Argentina, Australia, and Canada. IKAR cut its outlook for Russia’s wheat exports by 1.5 million tons to 44.5 million.