Market News

Soybeans down Friday, but still up on week

 

Soybeans were modestly lower on profit taking and technical selling. Beans saw a correction, but the fundamental outlook is neutral to bullish, with contracts posting solid week to week gains, expecting continued good demand. Argentina lost a lot of beans this year and Brazil may be producing a record crop, but their prices are higher. Stateside, the trade’s watching widespread, but still early, corn planting delays. Soybean meal was steady to weak and bean oil was lower, on profit taking and spillover from beans. According to wire reports, Paraguay’s export body projects 2017/18 production at 10 million tons, down 300,000 from 2016/17. Paraguay is the world’s fourth biggest soybean exporter, selling around 60% of domestic production, mostly to the European Union and Russia, but Argentina is also a customer.

Corn was modestly lower on commercial and technical selling, with slight week to week losses in the most active months. Development conditions look good for Brazil’s second crop, the source of most of their exports, but some forecasts are calling for increased rainfall during pollination. Near term U.S. forecasts have more precipitation and cool temperatures for most of the Cornbelt. Medium term forecasts have generally cooler than normal temperatures in many areas until later this month or early May. If those hold, it’ll further limiting planting activity and hamper development in some key U.S. growing areas. Ethanol futures were lower. No timeline has been announced for the White House’s year round E-15 plan, and there are continued uncertainties about Chinese tariffs, proposed re-entry into the TPP, and NAFTA.

The wheat complex was lower on commercial and technical selling. Kansas City led the way down as some 10-day forecasts have an increased chance of precipitation in parts of Kansas, but nothing’s really changed for other areas. Large swaths of the southern Plains remain in drought or near drought conditions and the northern Plains and Canada are expected to see more planting delays, while the Delta and eastern Midwest should generally stay wet and cool. In any event, the entire global fundamental picture is bearish, with the next set of supply and demand numbers out May 10th. World crop conditions generally look good and the last round of USDA projections had another large global crop. Taiwan is tendering for 92,975 tons of U.S. milling wheat.