Market News
Soybeans, corn both see modest gains
Soybeans were higher on short covering and technical buying. Contracts saw a bounce after Tuesday’s losses, with help from a higher move in bean oil. Soybean oil saw some gains despite more losses in palm and crude oils, while soybean meal was down on product spread trade and slower than anticipated export demand as buyers wait for Argentina’s crop to be processed. Rain is delaying planting in parts of the U.S. and the harvest in portions of South America. The trade is also monitoring the potential for fewer U.S. soybean acres due to the fast pace of corn planting. ANEC sees Brazil’s April soybean exports at 13.62 million tons, compared to the prior guess of 13.48 million. Brazil continues to dominate global soybean trade, especially with China. The USDA’s updated supply and demand numbers is out May 10th and CONAB’s new outlook for Brazil is set for May 10th. The USDA says 204 million bushels of soybeans were crushed in March, at the low end of pre-report expectations, but still up 10 million on the month and 6 million on the year, with bean meal and oil stocks also above a year ago.
Corn was modestly higher on short covering and technical buying. Corn is watching the U.S. planting delays, and the warm, dry weather impacting Brazil’s second crop and rain delaying Argentina’s harvest. Brazil’s ANEC estimates April corn exports at 76,655 tons, compared to last week’s projection of 81,728 tons. The domestic supply bearishness is partially canceled out by solid ethanol and export demand. The U.S. Energy Information Administration says ethanol production last week averaged 987,000 barrels a day, an increase of 33,000 on the week and 11,000 on the year, with stocks of 25.488 million barrels, a 12-week low, falling 245,000 from the previous week, but still 2.125 million above a year ago. The USDA says 468.75 million bushels of corn were used for ethanol production in March, an increase of 5% from the previous month and 7% from last year, with DDGS production of 1,931,965 tons, up 7% from February and 13% from Marc 2023. The Biden administration’s guidance on sustainable aviation fuel should be a positive for ethanol demand, despite some industry issues with the regulations.
The wheat complex was mostly lower. Wheat remains technically overbought and the trade is largely ignoring world weather issues, for now. That includes dry weather in parts of the southwestern U.S. Plains, Australia, and the Black Sea region, and excessively wet conditions for portions of the eastern Midwest and Delta, and western Europe. Spring wheat planting delays are probable in the northern U.S. Plains and Canada due to rain, but that improved soil moisture should be a net positive. Even then, any significant upside would be limited by the slow export demand for U.S. wheat. Russia and Ukraine continue to hold the lion’s share of the global market. Brazil’s ANEC expects April wheat exports to be 109,126 tons, compared the prior week’s estimate of 110,592 tons. The USDA’s weekly sales numbers are out Thursday morning. The USDA says 904.461 million bushels of wheat were used for flour production in 2023, 3% less than 2022, with flour production 2% lower at 419.998 million hundredweight. For the first quarter of 2024, 226.545 million bushels of wheat were ground for flour, slightly less than 1% below Q1 2023, with flour production of 105.532 million hundredweight, an increase of less than 1%.
Add Comment