Market News

Soybeans, corn down on lack of China deal

Soybeans were lower on fund and technical selling. The most recent round of trade talks with China reportedly went well, but there’s no agreement yet. No timeline has been announced for the next round of negotiations and details about more Chinese purchases of U.S. ag goods are sketchy. African swine fever continues to be a big question mark for Chinese soybean demand. Argentina’s soybean harvest is picking up steam at around 10% complete and about 75% of Brazil’s crop is harvested. The Rosario Grain Exchange’s latest guess for Argentina’s crop is now 54 million tons. With both of those nations expected to produce big crops, more export competition is likely. Soybean meal and oil were lower, following beans. Losses in bean oil were limited by the higher move in crude. Beans are also watching U.S. crop weather and waiting to see how many acres are shifted away from corn and spring wheat. The USDA’s attaché in Egypt pegs 2018/19 soybean imports at 3.5 million tons, rising to 4 million in 2019/20. The U.S. supplied 3.0 million tons during calendar year 2018. Egyptian consumption of soybean meal and oil is also expected to continue to increase.

Corn was modestly lower on fund and technical selling. Corn is also waiting to see what happens next with China, while watching U.S. weather. Medium and long-term forecasts generally look wet for most of the Delta, Midwest, and Plains, probably delaying fieldwork and planting activity. It’s still early, but more significant delays might lead to changes in planting plans. The USDA is expected to issue its first U.S. corn planting pace estimate of the season Monday. Ethanol futures were lower. The industry is waiting for the results of the E15 comment period and to see if China’s interested in buying U.S. ethanol. Beijing has also reportedly expressed interest in U.S. DDGS and sorghum. Commodities in general are also waiting to see what happens with Mexico and the USMCA. DTN says 12% of Argentina’s corn crop is harvested.

The wheat complex was lower on fund and technical selling. The fundamentals are bearish, with no better than steady export demand for U.S. wheat and a large world supply. Hard red winter conditions generally look good, but there are concerns about wet weather in some soft red winter growing areas. World conditions also mostly generally look good, aside from a few dry areas, including parts of China and Canada. New USDA supply and demand estimates are out on the 9^th at Noon Eastern/11 Central. U.S. and world supplies could be down on the month but are expected to be relatively ample. Minneapolis made another new contract low on expectations for increased spring wheat acreage in Canada, along with spread unwinding against the winter wheat pits. DTN says the Philippines bought 50,000 tons of feed wheat.