Market News

Wheat mixed Monday, despite ongoing drought concerns

Soybeans were mixed. Planting weather generally looks favorable, with more rain in the forecast for parts of the Midwest. The USDA says 12% of U.S. soybeans are planted, compared to the five-year average of 5%. Argentina is looking at harvest delays, but early yields are good, even if there are concerns about quality. Brazil’s record harvest Could wrap up in the next couple of weeks. Soybean export inspections were up on the week and the year, primarily to China and Egypt. Soybean meal futures were sharply lower and soybean oil was solidly higher on aggressive product spread adjustments. Bean oil picked up additional support from a rally in crude oil during most of Monday’s session, with the Strait of Hormuz once again largely closed to commercial shipping traffic. If it’s still ongoing, the military action in Iran and the Middle East could delay the expected face-to-face trade talks between the U.S. and China tentatively set for mid-May.

Corn was higher on short covering and technical buying. Corn is monitoring U.S. planting conditions, expecting good progress in many areas ahead of another slowdown due to rain. According to the USDA, 11% of U.S. corn is planted and 4% has emerged, compared to the averages of 9% and 2%, respectively. Argentina’s crop is about 25% harvested and some second crop corn areas in Brazil need rain. The USDA’s next round of supply and demand estimates is out May 10^th, while CONAB’s updated outlook for Brazil is set for May 14^th. The USDA says corn export inspections were below a week ago and a year ago, but still more than what’s needed to meet projections for the current marketing year. The leading destinations for the week were two of the usual top slot occupiers: Mexico and Japan.

The wheat complex was mixed, with Chicago up, Kansas City down, and Minneapolis steady to firm. Parts of the Plains saw a freeze over the weekend and some areas of the region might stay dry until next week. That might be too little, too late for a portion of the hard red winter crop. For winter wheat, 30% is rated good to excellent, down 4%, with 20% of the crop emerged, compared to the usual rate of 12%. For spring wheat, 12% is planted and 2% has emerged, matching most years at this time. Globally, the trade is looking at emergence in Europe, Russia, and Ukraine, along with how fertilizer availability challenges might disrupt planting in the Southern Hemisphere, including Argentina and Australia. Export inspections were higher than the prior week and modestly more than last year, mainly to the Philippines and Mexico.