Market News

Soybeans, corn, wheat start week with losses

Soybeans were lower on profit taking and technical selling. There was some spillover pressure from meal and the broader market with beans watching South American harvest activity. Brazil is now past the 80% mark, while Argentina is getting close to 15%. The USDA’s next set of supply, demand, and production estimates is out May 10^th, with CONAB’s updated outlook for Brazil on May 14^th. Stateside, the USDA was expected to report widespread planting is getting underway. The USDA says 3% of U.S. soybeans are planted, compared to the five-year average of 1%. Soybean export inspections were below the previous week and a year ago, with China and Indonesia leading the way. China reportedly bought soybeans from Argentina and Brazil last week. The NOPA says member firms crushed a monthly record of 196.406 million bushels of soybeans during March, an increase of 5.5% on the month and 5.7% on the year, with oil stocks topping pre-report expectations. That larger than expected stocks number, and the losses in crude oil during the CBOT session, sent soybean oil futures lower.

Corn was lower on profit taking and technical selling. There’s some rain in the forecast for parts of the Corn Belt this week, delaying planting, but recharging soil moisture. Those systems are also expected to bring cooler temperatures to much of the region. As of Sunday, 6% of U.S. corn is planted, compared to 5% on average. Weekend rain in Argentina and Brazil was solid ahead of an expected drier pattern. Still, what fell over the weekend, along with seasonal temperatures, could limit significant impact. Mexico bought 165,000 tons of U.S. corn ahead of the open, with 135,000 tons for 2023/24 and 30,000 tons for 2024/25. Export inspections last week were ahead of what’s needed to meet expectations for the current marketing year, mainly to Mexico and Japan. Corn for ethanol use and export demand continue to be two very bright lights for the corn demand outlook.

The wheat complex was lower on profit taking and technical selling. The dollar held near multi-month highs during the session, further limiting already slow U.S. export demand. The USDA says export inspections were up on the week and the year, with China and the Philippines topping the list. With about a month and a half left in 2023/24, the pace continues to trail 2022/23. U.S. winter wheat conditions were expected to be down on the week due to expanding dry conditions in parts of the Plains ahead of this week’s forecasted rain. For winter wheat, 55% of the crop is called good to excellent, down 1% from the previous week, but up 28% from a year ago, with 11% headed, compared to the normal rate of 7%. For spring wheat, 7% of the crop is planted, compared to the typical pace of 6%. That rain is mostly welcome, but there is the potential for severe storms in some areas, which could damage winter wheat during early development, and parts of the Plains could see a frost, albeit short-lived. Dry weather is an issue in parts of Australia ahead of planting and in Russia and Ukraine for winter wheat emergence, while excessively wet conditions in Europe have had an impact on crop conditions.