Market News

Soybeans, corn, wheat bounce higher Friday

Soybeans were higher on fund and technical buying, but still finishing the week with losses. Contracts were a little oversold and unknown destinations bought 121,500 tons of mostly new crop U.S. beans ahead of the open. 13,500 tons are for 2023/24 and 108,000 tons are for 2024/25. The new marketing year for U.S. soybeans starts September 1st. Brazil’s harvest is approaching 90% complete, while Argentina is seeing rain delays, potentially also impacting crop quality. The USDA’s next round of supply and demand estimates is out May 10th, with CONAB’s update for Brazil on May 14th. Soybean meal and oil were up on solid domestic crush demand, even if export demand for U.S. bean products has been slightly disappointing. The trade continues to keep an eye on U.S. conditions as widespread planting gets underway.

Corn was higher on fund and technical buying, trimming the weekly losses slightly.
Corn is watching those harvest delays and pest damage in Argentina, along with second crop development weather in Brazil. Parts of Brazil should receive some near-term rainfall, but after that, the dry season is expected to start in earnest, sapping soil moisture, especially in already dry central Brazil. Forecasts for most of the Corn Belt in the coming week look favorable for planting after a weekend cold front passes through the region. The USDA’s weekly crop progress and condition numbers are out Monday afternoon. Mexico purchased a total of 216,500 tons of U.S. corn Friday morning, with 23,000 tons for this marketing year and 193,500 tons for next marketing year. Export and ethanol demand continue to be bright spots for corn, but that’s partially blunted by supply bearishness. Friday’s E15 waiver from the EPA is a positive for demand, even if the industry would prefer year-round access.

The wheat complex was higher on fund and technical buying, settling mixed for the week. Near-term rain forecasts for the Plains are mixed, generally favoring northern growing areas over the central and southern Plains. That should boost soil moisture ahead of widespread spring wheat planting even as dry weather remains an issue further south for hard red winter. Meanwhile, some U.S. soft red winter areas are contending with excessive soil moisture. Globally, dry weather is an issue in parts of the Black Sea region, Canada, and Australia, while parts of western Europe are seeing the impact of heavy, untimely, rainfall. Wheat is finding some interest around these price levels, but that upside is limited by slow export demand. Russia and Ukraine continue to take up most of the global market share due to a price advantage, despite their ongoing war and the recent issues regarding phytosanitary certificates for Russian wheat. Russian grain trader RIF says a vessel that had been sitting at a port for weeks intended for Egypt has received its certificate. SovEcon projects Russia’s April 2024 wheat exports at 4.2 to 4.6 million tons, compared to a record 4.9 million in March and a record 4.4 million for April 2023. Argentina’s farmers are pushing Buenos Aires to end its 12% wheat export tariff. India’s government says warehouse wheat stocks are at 16-year lows following two years of increased sales onto the domestic market to combat price inflation.

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