Market News

Corn closes mostly higher, soybeans down

Soybeans were lower on fund and technical selling. Soybeans are watching U.S. planting and development conditions, with rain in some areas in the near-term forecast, but medium-term outlooks generally have a drier pattern in parts of the region. If that forecast follows through, it could cause some early damage to this year’s crop. Brazil’s record large soybean harvest is nearly complete, with CONAB’s updated outlook scheduled for Thursday morning. Brazil’s grain group ANEC estimates May soybean exports at a record 15.35 million tons. There was talk, but no confirmation during the session, that China purchased soybeans from Brazil. China’s General Administration of Customs says April soybean imports were short of expectations at 7.26 million tons. Soybean meal was up and bean oil was down on the adjustment of product spreads. Bean oil had additional pressure from crude oil and palm oil losses.

Corn was steady to modestly higher. The near-term supply is tight and farmer selling is light with most concentrating on planting, even as export demand continues to be slow. The U.S. Energy Information Administration says ethanol production last week was a four-week low, averaging 965,000 barrels a day, a decrease of 11,000 on the week and 26,000 on the year, with stocks at a 22-week low of 23.291 million barrels, a decline of 72,000 from the prior week and 849,000 below a year ago. There are expectations the USDA will lower the old crop export projection in the next set of supply and demand numbers, out Friday. The report will also include the first new crop projections of the season. The 2023/24 marketing year for corn, and soybeans, starts September 1^st. Corn is also monitoring second crop corn conditions in Brazil. Near-term outlooks are generally favorable, but longer-term forecasts have a drier pattern in some areas with the potential for a frost/freeze event. The USDA is expected to cut its production estimate for Argentina Friday.

The wheat complex was mixed. There’s some rain in the forecast for the southern Plains, but it’s too late to help hard red winter, while soft red winter is in comparatively good condition. Meanwhile, in the northern Plains, spring wheat planting and emergence are behind schedule due to cool, wet weather. Dry weather is preventing spring wheat planting in parts of the Canadian Prairies and could limit acreage in Argentina. Export demand continues to be slow, with Russia dominating the global market. The trade is waiting to see if the Black Sea Grain Initiative is extended past the May 18^th deadline. Russia wants sanctions repealed, even as it continues to attack Ukraine, while Kyiv says the current version of the agreement is essentially dead with Russia not inspecting most outgoing ships. The USDA’s weekly U.S. sales numbers are out Thursday morning.