Market News
Another sharply higher finish in wheat
Soybeans were mostly lower on spread trade and profit taking, still finishing the week with strong gains. Beans couldn’t follow through on early gains despite energy and vegetable oil export delays from the Black Sea caused Russia’s invasion of Ukraine. Ukraine is the world’s biggest producer and exporter of sunflower oil and a major seller of canola oil. Crude oil did end Friday’s session sharply higher, supported by the invasion’s impact on energy trade, while bean oil was pressured by profit taking sparked by losses in Malaysian palm oil. The trade is also monitoring development and harvest conditions in Argentina, Brazil, and Paraguay. Safras e Mercado projects Brazil’s soybean crop at 125.08 million tons, compared to the prior guess of 127.17 million. Ahead of Friday’s open, unknown destinations bought 125,000 tons of U.S. beans, Mexico picked up 108,860 tons, and China purchased 106,000 tons, all for 2021/22 delivery. That pushed the six-business day running total to 2,140,860 tons, with 1.06 million of that new crop. Soybean meal was higher on commercial buying.
Corn was higher on commercial and technical buying, capping off a week of big gains, including nearly $1 in the May contract. Corn is also monitoring Black Sea region, Ukraine is a major exporter of corn, while getting some spillover support from the sharply higher move in wheat. Those export difficulties and the potential for the invasion dragging on long enough to impact planted area in Ukraine has led to talk of China buying U.S. corn, but nothing has officially materialized. Unknown destinations did buy U.S. corn Thursday, but it remains to be seen where that corn is headed. Near-term weather in parts of South America generally looks favorable for development, but that’s expected to preserve current yield prospects, not improve them all that much. The trade is also waiting to see what happens with Brazil’s critical second corn crop. The Rosario Grain Exchange has Argentina’s corn crop at 48 million tons. The USDA’s next set of production estimates is out on the 9th with CONAB’s updated outlook for Brazil on the 10th. Ethanol futures were unchanged.
The wheat complex was sharply higher on commercial and technical buying, and while many months closed below the day’s highs, May Chicago, Kansas City, and Minneapolis all posted extremely strong weekly gains. May Chicago did close $.75 higher, ending the session at a 14-year high. Ukraine’s ports are closed and very few nations are willing to do any business with Russia right now, with sanctions impacting payment systems and the invasion severely restricting commercial traffic in and around the Black Sea. Russia and Ukraine combine for about a third of the world’s wheat exports. Spring wheat planting in Ukraine is in doubt. There’s some talk the European Union will allow farmers to plant on fallow ground and the E.U. is best positioned to fill some of the holes left in the wheat export market. The trade is also monitoring weather in the U.S. Plains. Drought or near drought conditions in the region are expected to cut winter wheat yields and could impact spring wheat planting in the northern and northwestern U.S. Plains into Canada. Soft red winter wheat in the eastern Midwest is generally in better shape, but there are concerns about excessively wet conditions in parts of the region.
Add Comment