Market News

Soybeans continue downward drift

Soybeans were lower on commercial and technical selling, cementing a lower weekly finish. Contracts were pressured by spillover from bean oil and those improved conditions in much of South America. Brazil’s harvest is gaining momentum in many areas and harvest activity is getting underway in parts of Argentina. The Buenos Aires Grain Exchange says the recent rainfall has helped stabilize conditions. The USDA’s next set of global production numbers is out April 9^th in the regular monthly supply and demand report. U.S. soybean prices are currently at a premium to Brazil. Chinese demand for U.S. soybeans has dropped recently as Brazil’s harvest has moved forward. Soybean meal was mostly higher, adjusting spreads, while bean oil was sharply lower, including a limit loss in the May contract on profit taking, with no real changes to the vegetable oil fundamentals, including expectations for stronger domestic biodiesel demand.

Corn was modestly higher on short covering and technical buying but ended the week modestly lower. Corn saw a slight bounce off the lows, also watching South America, especially the tail end of the planting pace for Brazil’s second corn crop, the source of most of that nation’s exports, but a potential drier pattern is an area of concern. The Buenos Aires Grain Exchange says 7% of Argentina’s crop is harvested with 26% of that corn crop rated good to excellent, up 4% on the week. Most near-term forecasts have more rain in the Midwest and Plains ahead of widespread U.S. planting and there are concerns about soil temperatures in parts of the region. The USDA’s prospective planting report is out on the 31^st, along with quarterly grain stocks. According to reports, 7% of U.S. grain shipments, 80% of that corn, could be impacted by delays caused by congestion on Egypt’s Suez Canal. Ethanol futures were higher.

The wheat complex was mixed, with Chicago and Kansas City up and Minneapolis mostly weak. Contracts are oversold and most of the northern U.S. Plains and parts of Canada will need more rain ahead of spring wheat planting, potentially restricting acreage. The recent rain in U.S. winter wheat growing areas is helping crop conditions and the global supply outlook is bearish, limiting gains. The most active months at the three U.S. pits all closed lower. Some U.S. hard red winter growing areas are expected to see a return to a drier pattern in April. New USDA condition estimates are out next week for some states and the weekly national crop progress and condition reports resume April 5^th. For Australia, the recent widespread flooding is expected to help recharge soil moisture ahead of the next round of planting, which could boost acreage projections. DTN says Ethiopia is tendering for 400,000 tons of milling wheat.