Market News

Wheat leads soybeans, corn higher

Soybeans were higher on short covering and technical buying, also taking the lead of the wheat market. Contracts were oversold, seeing a bounce after the recent losses, including a new multi-month low set on Monday. CONAB lowered its estimate for Brazil’s bean crop by 4.5% to 113.5 million tons, but it’d still be the third largest on record. The USDA’s most recent guess of 116.5 million tons and AgRural has the crop at 112.9 million tons. Soybean meal and oil were higher, following beans. The trade is waiting for more news on talks with China, while watching the spread of African swine fever, which has had a negative impact on soybean meal demand. Reportedly, no date has been set for the next round of face to face talks between the U.S. and China. IEG Vantage, formerly Informa Economics, pegs U.S. soybean acreage at 85.494 million acres, down 600,000 from their prior projection.

Corn was higher on short covering and technical buying, in addition to spillover from wheat. Corn also had an oversold bounce, while CONAB raised its projection for Brazil’s corn crop to a combined 92.8 million tons, with a 23.6% increase in planted area for the second crop. That’ll likely drive down South American prices and increase export competition. The trade is watching weather in the Midwest ahead of widespread planting activity, with prospective planting and quarterly stocks out on the 29th. IEG Vantage’s new estimate for U.S. corn planted area is 91.771 million acres, slightly more than the firm’s last guess. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks data is out Wednesday. Tuesday, the EPA announced proposed rules for year-round E15 use and modifications to RIN provisions, which were greeted positively by the industry. Corn is also waiting to see what happens with China, the European Union, and Japan.

The wheat complex was sharply higher on short covering and technical buying, rallying of off the most recent round of contract lows in Chicago and Kansas City. Winter wheat led the way down and led the way back up, at least for one session. The overall fundamental outlook continues to be bearish, with the next set of supply and demand estimates out April 9th, so the likelihood of an extended rally is questionable. If anything, Minneapolis has the best fundamental situation, with comparatively good demand for higher protein wheat and possible planting delays. IEG Vantage has spring wheat planted area at 13.58 million acres, with durum at 1.852 million, and total wheat acreage of 31.29 million acres. Month to month, condition ratings for winter wheat have been mixed. Japan is tendering for 116,365 tons of food wheat from the U.S., Australia, and/or Canada, while Tunisia is in the market for 42,000 tons of durum.