Market News

Soybeans up, corn mixed ahead of more trade talks

Soybeans were modestly higher on short covering and technical buying. The trade continues to wait and see what happens in talks with China, which resume Wednesday. Progress is reportedly being made. The USDA’s attaché in China projects 2018/19 soybean imports at 88 million tons, rising to 91.5 million in 2019/20. The USDA says African swine fever is still a factor in feed demand, but many Chinese consumers are switching to beef, chicken, or seafood, all of which would require increased meal imports or domestic crushing. Beans are also waiting for widespread U.S. planting to get underway and what kind of acreage adjustments are in store. Planting has started in the south. Soybean meal and oil were higher, following beans. The trade is also watching development and harvest conditions in Argentina and Brazil. According to Allendale and Brazil’s trade ministry, soybean exports during March were 8.95 million tons, compared to 8.81 million in March 2018. Agrural says 75% of Brazil’s crop is harvested.

Corn was mixed on old crop/new crop spread adjustments in light trade volume. Corn is also waiting to see what happens with China and watching planting conditions in the Midwest and Plains. The USDA is expected to issue its first planting figure of the season next week. The big question is how planting intentions have been changed by either flooding or wet weather, with the potential for wet conditions in much of the Midwest and Plains through May. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The numbers will likely show the impact of flooding in key production areas for the second consecutive week. FC Stone now pegs Brazil’s total corn crop at 94.39 million tons, up more than half a million from the previous projection.

The wheat complex was mostly lower, with Chicago mixed and Kansas City and Minneapolis down. The USDA 56% of winter wheat is in good to excellent shape, compared to 32% a year ago, with better conditions for hard red than soft red, supporting the nearby Chicago contracts. May Minneapolis notched a new contract low, even with the specter of spring planting delays in the northern Plains. New USDA supply and demand numbers are out on the 9^th. Globally, there are some dry weather concerns in Canada, Australia, the Black Sea region, and China, but it’d take a large shift in production to really change the fundamentals for U.S. wheat. DTN says Jordan bought 60,000 tons of milling wheat from an “unknown origin”, while Algeria is tendering for 50,000 tons of milling wheat and Japan is in the market for 119,902 tons of food wheat from the U.S. and/or Canada.