Market News

Soybeans, corn give back some gains

Soybeans were lower on profit taking and technical selling. There are more indications of progress in the trade deal with China, but public details are sketchy. Weekly export numbers were bearish and there’s a lot of competition from Brazil, with more on the horizon. CONAB has 2019 soybean production for Brazil at 113.8 million tons, down 4.6% from 2018’s record and below the USDA’s current guess, but still the third largest on record, if realized. Brazil’s government says it expects April soybean exports to hit 8.8 million tons. The Buenos Aires Grain Exchange raised its outlook for Argentina to 55 million tons thanks to better than expected yields. Soybean meal and oil were lower on the implications of big South American crops and the uncertainty regarding China. That certainty is a bigger factor for bean meal because of the potential demand devastation from African Swine Fever. That said – other types of livestock are also fed meal, but there are still more unknowns than knowns at this point.

Corn was modestly lower, drifting down on profit taking and technical selling. Corn is also waiting to see what happens next with China and much of the Delta, Midwest, and Plains are wet and cold, delaying planting. While it is maybe still a little too early to get too concerned, if this persists, it could lead to some lost acreage for corn. Weekly exports were bearish, continuing to slow down because of increased competition from Ukraine and South America. CONAB has Brazil’s total crop at 94 million tons, up 16.5% on the year, with a second crop of 68.1 million tons. The Buenos Aires Grain Exchange pegs Argentina’s corn crop at 48 million tons. Ethanol futures were higher, buying back some of the recent losses. More talk, but no confirmation, of China buying U.S. ethanol, DDGS, and sorghum. Weekly sorghum sales were also bearish.

The wheat complex was modestly higher on short covering and technical buying. Minneapolis is concerned about spring wheat planting delays in the northern Plains and weather is expected to have a mixed impact on winter wheat, better for hard red than soft red. The fundamental outlook is bearish, with another bearish week for the export numbers and less than two months left in the 2018/19 marketing year. The USDA’s next set of supply and demand estimates is out May 10^th. The Buenos Aires Grain Exchange has Argentina’s 2019/20 wheat crop at 20.6 million tons. Strategie Grains lowered its European Union soft wheat production guess to 144.8 million tons because of dry weather in some areas, but that would still be up sharply from last year, when production was slashed by drought.