Market News

Soybeans up, but questions about trade continue

Soybeans were higher on commercial and technical buying. The U.S. and China have reportedly agreed to a phased removal of tariffs after phase one of the trade deal is signed. After the close, there were reports of internal White House dissension over tariff removal and in any event, no date has been announced for signing of phase one. Weekly export numbers were bullish, with China buying more than half of the total. The trade is also watching planting conditions in Argentina and Brazil. Soybean meal was sharply higher and bean oil was lower on the adjustment of product spreads. The USDA says China bought 136,000 tons of U.S. soybeans and the Philippines purchased 133,000 tons of U.S. bean meal, with delivery on both set for the current marketing year.

Corn was modestly lower on fund and technical selling. The trade expects mixed U.S. harvest progress, while weather in South America generally looks better for planting and development. Weekly export numbers were bearish, reflecting the high level of competition from Ukraine and South America. Back stateside, most near-term forecasts are dry into next week, but most of the outlooks are cold. That’ll help harvest pick up steam in some areas but won’t melt the recent snow fall in northern parts of the Corn Belt. Ethanol futures were higher. The USDA’s attaché for Russia pegs 2019/20 corn production at 13 million tons, compared to 11.415 million in 2018/19, with exports of 4.04 million tons.

The wheat complex was modestly lower on fund and technical selling. Weekly export numbers were bearish, but sales remain ahead of last marketing year, at least for now. The USDA expects a record global supply at the end of the marketing year and crop losses in some competing exporters are being canceled out by larger crops in other nations. The USDA’s attaché for Russia estimates 2019/20 wheat production at 74 million tons, down 5 million from their previous guess, but a few million below what Moscow is currently projecting. Exports are seen at 34 million tons, with Saudi Arabia recently opening to Russian wheat. Ukraine’s Ag Ministry pegs 2019 grain production at 71 million tons, down 800,000 from the last estimate. Expected rainfall in soft red winter growing areas is seen as beneficial ahead of widespread dormancy. The USDA’s new supply, demand, and production estimates are out Friday at Noon Eastern/11 Central. DTN says Japan bought 123,928 tons of food wheat from the U.S., Australia, and Canada. Australia will reportedly offer low interest loans to producers impacted by the ongoing drought. Allendale says Brazil’s Ag Ministry has enacted a 750,000 ton per year tariff free quota on wheat imports.