Market News

Grains, oilseeds fall, but no changes to fundamentals

Soybeans were lower on profit taking and technical selling, in addition to spillover from the broader market. Beans gave back some recent gains, continuing to watch the mixed U.S. planting progress. Unknown destinations bought 229,200 tons of U.S. soybeans, with 10,200 tons for 2021/22 delivery and 219,000 tons for 2022/23. The USDA’s weekly sales numbers are out Thursday morning. Brazilian firm AgResource says 98.1% of that nation’s soybean crop is harvested, a little bit slower than a year ago, pegging the crop at 119.73 million tons. Soybean meal was mixed on bull spreading, while bean oil was sharply lower on profit taking. Crush margins have narrowed but remain profitable. Soybean oil also has Indonesia’s palm oil export ban and the lack of sunflower oil exports from Ukraine as supportive background factors. COVID lockdowns are reportedly set to ease in parts of China, which should benefit export business.

Corn was lower on fund and technical selling. Corn saw a correction, with additional pressure from wheat, still watching demand factors and weather. U.S. planting remains slower than average in many areas, with parts of the region expecting more rain over the next few days. The trade is also monitoring planting in Ukraine with uncertainties about acreage due to Russia’s invasion. Dry weather continues to plague second crop corn in central Brazil, but AgResource has held their production estimate unchanged, for now, at 108.15 million tons. China’s General Administration of Customs says corn imports for April were 2.21 million tons, up 19.4% on the year. It doesn’t specify how much of that was from the U.S., but the share was probably larger than last year due to Ukraine’s near total absence from the market. The U.S. Energy Information Administration says ethanol production last week averaged 991,000 barrels a day, unchanged on the week and down 41,000 on the year, while stocks were reported at 23.791 million barrels, a decline of 349,000 from the previous week, but a jump of 4.358 million barrels from a year ago. While ethanol margins are well below the 2021 highs, they are still positive for most producers.

The wheat complex was sharply lower on profit taking and technical selling. Wheat took a breather, with continued U.S. and world weather concerns a big factor. Stateside, a major crop tour ongoing in the U.S. Plains has hard red winter yields well below a year ago, with some soft red winter areas excessively wet and spring wheat planting delayed by wet, cold weather. Globally, weather issues are a problem in parts of Europe, India, and China. That’s further complicating the global supply outlook, leaving fundamentals bullish. The USDA’s next set of supply and demand estimates is out June 10^th. Ukraine’s ag ministry says 75% of spring crop acreage has been planted, but that’s still expected to be a much lower than normal total due to the invasion by Russia. SovEcon estimates Russia’s wheat crop at a record 88.6 million tons, up 1.2 million from the last guess.