Market News

Soybeans rally on China talk, Argentina rain

 

Soybeans were higher on commercial and technical buying. Contracts bounced back from Friday’s losses and the trade has at least some optimism for advancement in trade talks with China. Argentina’s soybeans experienced another round of heavy, crop damaging and harvest delaying rainfall over the weekend ahead of what’s expected to be a mostly drier pattern. Stateside, as of Sunday, 35% of U.S. beans are planted, compared to 29% a year ago and the five-year average of 26%, and 10% has emerged, compared to 7% last year and 6% on average. The USDA’s monthly Oil Crops Outlook update has bean production this year at 4.28 billion bushels, with planted area of 89 million acres. The average estimate for Tuesday’s NOPA April data have member firms crushing 161 million bushels of soybeans, which would be a new monthly record. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was steady to fractionally lower. Many forecasts have more near-term rainfall in parts of the Midwest, delaying planting, but helping soil moisture ahead of key development phases. The USDA says 62% of U.S. corn is planted, compared to 68% this time last year and 63% normally, while 28% has emerged, compared to 29% a year ago and 27% on average. Corn is also watching for any signs of progress in talks with China or about NAFTA. Ethanol futures were higher. According to wire reports, Spain has purchased U.S. sorghum, primarily for livestock feed, picking up some of the slack from China. Most forecasts have more mixed weather for Brazil’s second corn crop, with the most notable improvements expected in southern growing areas. Russia’s Ministry of Agriculture says corn exports for the marketing year to date are 4.77 million tons, ahead of a year ago.

The wheat complex was modestly lower on commercial and technical selling. Rain this week should help some of the U.S. winter wheat crop, but totals won’t break drought conditions in parts of the Plains. For winter wheat, 36% of the crop is rated good to excellent, up 2% on the week, but down 15% from this time last year, with 45% of the crop emerged, compared to 53% on average. For spring wheat, 58% is planted, compared to 75% a year ago and 67% on average, with 14% emerged, compared to 37% last year and 36% on average. The overall fundamental outlook is bearish, with about two weeks left in the current marketing year for wheat and new supply, demand, and production estimates out June 12th and updated acreage and quarterly stocks numbers due June 29th. Jordan is tendering for 120,000 tons of milling wheat and Tunisia is in the market for 100,000 tons, while Iraq is tendering for 50,000 tons of wheat. Russia’s Ag Ministry says year to date wheat exports are 35.21 million tons, faster than last year’s pace.