Another round of losses in soybeans, wheat
Soybeans were lower on fund and technical selling, with several months down sharply. Soybeans and products continued to liquidate as funds shed of their net-long positions. U.S. planting is slightly ahead of average, with more delays expected in some areas in the coming days. Still, it’s relatively early to get too concerned about soybean planting and further delays in corn planting could lead to some acres getting switched. Also, there’s a significantly less bullish fundamental outlook right now as Brazil wraps up its record harvest. That record crop in Brazil and expectations for at least some reduction in demand from China are limiting any positive influence from the crop woes in Argentina. CONAB’s updated outlook for Brazil is scheduled for May 11th, while the USDA’s next round of supply and demand estimates is out May 12th. The CME Group raised the regular daily trading limit on soybeans from $1 to $1.05 effective May 1st.
Corn was mostly firm on spread trade and oversold signals. Corn consolidated while watching U.S. planting and emergence conditions. Most forecasts have generally cooler, wetter conditions in some key growing areas into next week. Flooding is also an issue in parts of the region. Next week’s USDA numbers will likely reflect better planting and development weather in some areas than in others. Exports haven’t improved as much as some analysts were expecting and China did cancel on old crop U.S. corn Monday, but domestic demand continues to be solid. The U.S. Energy Information Agency’s weekly ethanol production and supply numbers are out Wednesday. The CME Group left the regular daily trade limit for corn at $.45.
The wheat complex was lower on fund and technical selling, near two-year lows. 26% of U.S. winter wheat is good to excellent, the lowest rating for this time of year in decades, with 41% called poor to very poor. Those poor winter wheat conditions are because of the hard red winter crop and while there’s some rain in the forecast for that region, it’s too late to help all that much. Soft red winter remains in comparatively good condition. Spring wheat planting and emergence are slower than normal, which is expected to continue over the next couple of weeks. Planting delays due to dry weather are an issue in the Canadian Prairies. Statistics Canada’s 2023 planted area numbers are out Wednesday. The European Union ag body MARS is projecting a 3% year-to-year increase in winter wheat yields for the bloc. The CME Group lowered the regular daily trading limit on wheat from $.65 to $.60 starting May 1st. It is increasingly unlikely Russia will commit to an extension of the Black Sea Grain Initiative with Ukraine.