Market News

Soybeans, corn, wheat in the red at midweek

Soybeans were lower on fund and technical selling. Soybeans are watching U.S. planting weather and expecting delays in parts of the Midwest and Plains. It’s still hypothetical, but any significant delays in corn planting could prompt some producers to switch to soybeans. Brazil’s record harvest is nearly 90% complete and they continue to control the export market. The USDA’s weekly U.S. sales numbers are out Thursday morning. Brazil’s crop continues to stand in stark contrast to Argentina, which has been hit hard by drought. Some sources anticipate Argentine imports of Brazilian beans could hit 700,000 tons in May. Most years, Argentina is the world’s largest exporter of soybean products. Soybean meal was down on fund selling and soybean oil was unable to sustain gains, finishing lower on a drop in crude oil.

Corn was lower on fund and technical selling. Near-term forecasts for some key growing areas look wet and cool, delaying planting activity. If delays persist, it could lead to some producers cutting back on corn acres in favor of soybeans. The domestic cash basis continues to be strong and Brazil could see a drier pattern next month, potentially stressing their second corn crop. Still, record production remains likely. The USDA’s next round of supply and demand estimates is out May 12^th. The U.S. Energy Information Administration says ethanol production last week averaged 1.024 million barrels a day, a two-month high, up 65,000 on the week and 77,000 on the year, with stocks of 25.293 million barrels, an increase of 165,000 from the previous week and 951,000 from a year ago. Corn is also monitoring the pace of Ukraine’s exports, with planted area expected to decline again this year because of war.

The wheat complex was lower on fund and technical selling, along with higher trade in the dollar. Russia has reportedly resumed inspections of Ukrainian grain, but the future of the Black Sea Grain Initiative remains in doubt. That’s largely due to complaints about sanctions by Moscow even as they continue to wage war on Ukraine. The trade is also watching more potential restrictions on exports of Ukrainian grain into central and eastern Europe as governments in those nations try to protect domestic producers and prices. The European Union says it will offer 100 million euros in compensation for producers in countries bordering Ukraine. Poland ended its brief restriction on Ukrainian grain exports, but only if the grain is in transit, not bound for a Polish destination. Very dry parts of the central and southern U.S. Plains could get frost this weekend, further damaging the already bleak prospects for the hard red winter crop. That region could also see some precipitation, but not enough to break the drought. Parts of the northern U.S. Plains are expected to get snow over the next few days, delaying spring wheat planting and increasing the chances for flooding downriver. China says it will sell 40,000 tons of wheat from state reserves on the 26^th. The USDA’s attaché in Kazakhstan estimates 2022/23 wheat production at a five-year high of 16.4 million tons. The office doesn’t expect an increase in acreage for 2023/24, but says stocks are higher because of 2021/22 export restrictions and imports of cheaper Russian wheat. Exports this marketing year are pegged at 10.5 million tons, compared to 8.455 million last marketing year and 9 million tons next marketing year.