Market News

Commercial demand supports soybeans

Soybeans were higher on commercial and technical buying, with deferred months coming off the lows late in the session. The USDA lowered U.S. ending stocks Tuesday on an increase in exports but cut the price outlook for the 2019/20 marketing year in response to expectations for a bigger global supply. The department also raised Brazil’s crop production and export guesses, along with imports by China. Brazilian beans remain cheaper than U.S. supplies, due in part to the recent lower move in their currency, in addition to the advancing harvest and growing supply. Soybean meal was mixed on old crop/new crop spread adjustments and bean oil was up on follow through buying.

Corn was higher on commercial and technical buying. The USDA raised ethanol use, but lowered exports, leaving U.S. ending stocks unchanged from January at 1.892 billion bushels. Crop conditions in most of Argentina and Brazil look non-threatening to favorable, with both nations apparently on track for large crops this year. Stateside, the trade is keeping an eye on weather ahead of widespread planting, including very wet conditions in parts of the southeastern U.S. Two South Korean feed mills have reportedly issued tenders for 130,000 and 66,000 tons of optional origin corn. Ethanol futures were narrowly mixed. The U.S. Energy Information Administration says ethanol production last week averaged 1.033 million barrels a day, down 48,000 on the week, while stocks were 24.358 million barrels, up 884,000, the largest supply since late last July. Widespread feed production has reportedly resumed in China.

The wheat complex was mixed, with Chicago and Kansas City up and Minneapolis steady to fractionally lower. The USDA raised U.S. wheat exports and is now projecting the tightest domestic supply in several years. The trade is also monitoring crop conditions in the Midwest and Plains, with generally better conditions for hard red winter than soft red winter. Wheat is also keeping an eye on pre-planting conditions for spring wheat in the northern U.S. Plains. DTN says Egypt bought 180,000 tons of wheat from Romania and Russia and Jordan purchased 60,000 tons of wheat, while Japan is tendering for 110,565 tons of food wheat from the U.S, Australia, and/or Canada. France’s AgriMer raised its’ estimate of soft wheat exports outside of the European Union by 200,000 tons to 12.6 million.