Market News

Soybeans, corn extend declines

Soybeans were lower on fund and technical selling, along with follow through selling and the relative strength in the U.S. dollar. Harvest is moving forward in Argentina and Brazil as widespread planting gets underway in the U.S. China has reportedly purchased a significant number of soybeans from China over the past few business days, partially because of the drop in the real. The USDA’s next round of supply and demand estimates is out May 10^th, with CONAB’s updated outlook for Brazil set for May 14^th. Export demand for U.S. beans continues to be slow, but domestic crush demand remains solid. Still, soybean meal and oil were lower on relatively slow demand for U.S. soybean products. For meal, that’s due to the larger crop in Argentina limiting export trade and for oil, that’s due to heavy competition for market share with other vegetable oils.

Corn was lower on fund and technical selling, in addition to the dollar and follow through selling. 6% of U.S. corn is planted, most of that in the south, with rain delays expected the Corn Belt this week. It’s early enough that there’s a limited potential impact from severe weather, including high winds, and the precipitation is generally welcome in much of the region. There’s rain in the forecast for southern Brazil ahead of a drier pattern, potentially stressing the critical second crop, and Argentina’s harvest is advancing. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The USDA’s Foreign Ag Service sees 2024/25 corn production at 26.6 million tons, compared to the 2023/24 total of 28.3 million due at least in part to a lack of profitability caused by the ongoing war with Russia. Exports are also expected to decline from last marketing year.

The wheat complex was mixed. Chicago was down with soft red winter wheat in better shape than a year ago, while Kansas City was supported by dry, windy weather in the central and southern Plains. The USDA’s winter wheat condition fell slightly from last week, but remains well above last year, even with those weather issues for a big chunk of the hard red winter crop. Minneapolis was up with the potential for spring wheat planting delays in the northern Plains. That precipitation is mostly welcome. Portions of the Plains could see a frost event later this week, but it’s expected to be relatively mild and short-lived. Egypt bought 120,000 tons of wheat from Ukraine. That wheat was priced above Russia, but phytosanitary standard and certificate issues are ongoing for the world’s biggest wheat exporters. There’s more rain in the forecast for some already very wet portions of Europe, while dry weather should have some effects on development in the Black Sea region. In the southern hemisphere, some key wheat growing areas in Australia are dry during the early stages of planting, but some relief is in the forecast with the impending end of El Nino conditions and anticipated change to La Nina. The USDA’s attaché for Ukraine projects 2024/25 wheat production at 21.1 million tons, compared to 23.141 million in 2023/24 because of relatively poor returns and lower planted area, with exports estimated at 12.8 million tons, compared to 17.5 million last marketing year.