Market News

Another down day for soybeans

Soybeans were lower on fund and technical selling. Soybeans saw another round of liquidation, with some spillover from the bearish uncertainty in the broader market, including a sharply lower move in crude oil. Brazil’s record harvest is ongoing as estimates for Argentina continue to fall. The USDA’s next set of supply and demand estimates is out April 11^th, with CONAB’s updated outlook for Brazil schedules for April 13^th. Stateside, the trade is keeping an eye on conditions ahead of widespread planting. The NOPA says member firms crushed 165.414 million bushels of soybeans in February, less than what analysts were expecting heading into the report, but the second highest for the month on record and slightly above the February 2022 total. Soybean oil supplies fell for the first time in five months. Soybean meal futures were lower, also on another round of liquidation, while bean oil was mixed on bull spreading.

Corn was mixed on bull spreading. China bought 667,000 tons of U.S. corn Wednesday morning, bringing the two-day total to 1.279 million tons, fulfilling some of the recent trade rumors. That’s another sign of the improving demand for U.S. corn as other exporters run short of supplies, but it’ll take strong sales and shipments to make up for the slower pace during the first half of the marketing year. Rain is in the near-term forecast for parts of Argentina, but it’s likely too late to really help. Second crop corn planting in Brazil is drawing to a close in some areas. While planting is underway in the southern Corn Belt, there could be some early delays in parts of the Midwest, depending on soil moisture temperatures. The U.S. Energy Information Administration says ethanol stocks hit a 50-week high last week at 26.394 million barrels, an increase of 1.074 million from the previous week and 449,000 from a year ago. Production averaged 1.014 million barrels a day, an increase of 4,000 on the week, but down 12,000 on the year.

The wheat complex was modestly higher on short covering and technical buying. Drought remains the big issue in the southwestern U.S. Plains, with a chance of a freeze in the forecast, damaging the emerging crop. Between drought and winter weather, there are a lot of questions about hard red winter yield numbers and abandonment rates. Temperatures in the northern U.S. Plains are signaling the potential for a late start to spring wheat planting. The USDA’s prospective planting numbers are out March 31^st. Soft red winter conditions remain comparatively good. The European Union says soft wheat exports for the marketing year to date are 21.54 million tons, compared to 19.84 million this time last year. The global market continues to largely be dominated by Russia and Ukraine, due mostly to a price advantage. 2022/23 U.S. sales continue to trail 2021/22, with less than a quarter remaining in the current marketing year. The USDA’s weekly sales numbers are out Thursday morning.