Corn sees slight bounce, soybeans able to close mixed
Soybeans were mixed on spread trade and oversold signals. Beans were down for most of the session on uncertainties in the broader market and the lower trend in bean meal. There’s also been pressure from Brazil’s advancing record harvest. On the bull side of things, beans are due for a bounce on a technical basis, crush margins are good, and domestic demand is solid. Additionally, it looks like the record crop in Brazil might not be enough to make up for the losses in Argentina. Argentina’s crush facilities are reportedly at their lowest operating capacity ever because of tight supplies tied to the ongoing drought. Argentina is typically the world’s largest exporter of soybean products. Brazil’s ABIOVE says that nation plans to increase its domestic crush to account for some of the shortfall. The International Grains Council sees 2022/23 world production at 370 million tons, 8 million less than last month on the losses in Argentina, with 2023/24 production at 399 million tons. U.S. export sales rebounded from last week’s marketing year low with China and Germany topping the list. The overall pace of shipments remains ahead of what’s needed to meet projections for the current marketing year. Soybean meal was lower on demand concerns, while bean oil was lower on a rally in crude oil.
Corn was modestly higher on short covering and technical buying. Corn was supported by recent demand from China, which bought 641,000 tons Thursday and has purchased 1.92 million tons this week, all for 2022/23. That fills the recent trade rumors, but more will be needed to avoid the USDA lowering its export outlook again April 11th. Last week’s sales were 1.24 million tons, down on the week, but larger than average, with Japan and Colombia leading the way. Wet conditions in portions of the Midwest could delay fieldwork and early planting, but it’s still early and the improvement in soil moisture is definitely a plus. Nearly all of the reported planting activity has been in the southern Corn Belt. The USDA’s prospective planting numbers are out on the 31st, along with quarterly grain stocks data. This week’s ethanol numbers look neutral with improved production against a big jump in stocks. Corn’s also watching second crop planting in Brazil and development conditions in Argentina. The International Grains Council projects 2022/23 world corn production at 1.15 billion tons, compared to 1.153 billion last month, rising to 1.202 billion tons in 2023/24.
The wheat complex was mixed with Chicago and Minneapolis modestly lower and Kansas City steady to weak. There’s some precipitation in the forecast for parts of the southern Plains, but it could miss some of the hard red winter drier areas. Longer-term outlooks are a little more favorable with an expected shift to an El Nino pattern this summer. Soft red winter conditions are comparatively good and the trade is watching weather in the northern U.S. Plains and Canada ahead of spring wheat planting. The Black Sea Grain Initiative is scheduled to expire Saturday. Russia and Ukraine continue to dominate the market due to a significant price advantage. Last week’s sales were more than 330,000 tons, above the prior week and the four-week average, mainly to the Philippines and Japan. In the final quarter of the 2022/23 marketing year, accumulated sales remain behind the 2021/22 pace. Germany’s farm coop association DRV estimates 2023 wheat production at 22.01 million tons, 2.3% less than 2022. The International Grains Council pegs 2022/23 world wheat production at 801 million tons, compared to 796 million in February, falling back to 787 million in 2023/24.