Market News

Wheat gains more ground with soybeans, corn mixed

Soybeans were mixed. Soybeans are watching late harvest activity in Brazil and the slowly advancing harvest in Argentina. Brazil’s harvest is nearly wrapped up and while prices are moving higher, they still hold a competitive advantage over the U.S. That’s significantly cut into U.S. export business, especially with China. Meanwhile, Argentina’s harvest is being hampered by wet conditions in some areas, which could also impact quality. The USDA’s next round of supply, demand, and production numbers is out May 10^th, with CONAB’s updated outlook for Brazil on May 14^th. There’s more rain in the forecast for parts of the Midwest later this week, with warmer temperatures on tap for much of the region, which should speed up planting. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was mixed. Corn is watching Argentina’s harvest inch forward, the dry weather affecting second crop development in parts of Brazil, and U.S. planting activity. Stateside, there are more probable delays later this week, with the potential for severe storms, but that rain should be long-term beneficial for soil moisture. Ethanol and export demand remain solid, but the large available supply continues to hang over the market. The U.S. Energy Information Administration says ethanol production last week averaged 954,000 barrels a day, the lowest since mid-January, down 29,000 on the week and 13,000 on the year, while stocks were a nine-week low at 25.733 million barrels, 347,000 lower than the previous week, but 3.027 million higher than a year ago.

The wheat complex was higher on speculative and technical buying. Rain in the forecast for the U.S. Plains later this week could miss some of the drier areas and dry weather is also an issue in parts of the Black Sea region. Additionally, there are weather issues in portions of Europe and Canada. There’s more talk of India will need to import a substantial amount of wheat this year to limit price inflation and bolster state reserves. Still, it remains to be seen how much of that, if any, would come from the U.S., with the U.S. at a price disadvantage to other origins, especially Russia and Ukraine. The USDA’s weekly sales numbers are out Thursday morning. Rain in Argentina should benefit soil moisture for winter wheat planting. The USDA’s attaché in Egypt says it expects 2024/25 wheat imports to hit 11.22 million tons, compared to 11 million for 2023/24 because of a rising population and improved governmental access to foreign currency. Domestic production next marketing year is pegged at 9 million tons, compared to 8.87 million this marketing year.