Market News

More supply, demand support for soybeans

Soybeans was higher on commercial and technical buying. Domestic demand for beans and global demand for vegetable oils continue to be strong, with tight supply a big factor for both. Old crop weekly exports were bearish, but are still on track to meet USDA expectations, and the NOPA crush numbers were bullish, but a little short of expectations at 177.984 million bushels. That’s up more than 22 million from February, but down more than 3 million from the all-time high for March, set in 2020. Weekly new crop U.S. soybean exports were pretty much neutral. China had a net cancellation on old crop but was the biggest buyer of new crop by a wide margin. Brazil’s April FOB soybean price hit a one-month high Thursday despite the ongoing harvest activity, likely because of demand factors. The Buenos Aires Grain Exchange left its production estimate for Argentina steady at 43 million tons, with just over 7% of the crop harvested, compared to 49 million a year ago. Soybean meal was supported by commercial demand and bean oil was mixed, mostly higher, on commercial spread adjustments. Weekly old crop soybean production export sales were marketing year lows, including a net reduction for bean oil.

Corn was mixed, mostly modestly higher, adjusting old/crop new crop spreads. Nearby months were down and deferred contracts were up as the trade tries to buy some new crop acreage. May did trade above $6 heading into the session and while it wasn’t a spectacular session for corn, prices remain around multi-year highs. Near-term forecasts have cooler than normal temperatures in the Midwest and dry weather in parts of the Plains, potentially causing issues during planting and early stages of development. The trade is also monitoring second crop development conditions in Brazil. The Buenos Aires Grain Exchange estimates Argentina’s corn crop at 46 million tons, up 1 million from the last guess thanks to better-than-expected yields, with harvest a little more than 14% complete. Weekly old crop U.S. corn export sales were essentially neutral after a cancellation by unknown destinations. Sorghum hit a marketing year high, driven by demand from China and unknown. The marketing year for corn, sorghum, and soybeans runs through the end of August. Ethanol futures were higher for the third session in a row. Strategie Grains estimates the 2021 corn crop for the European Union and United Kingdom at 65.1 million tons, up 100,000 from March, compared to 62.6 million for 2020.

The wheat complex was higher on fund and technical buying, rallying after early mixed activity. Chicago and Kansas City are monitoring winter wheat conditions, while Minneapolis is watching weather in the northern U.S. Plains and Canada that could potentially limit spring wheat planting. There are also concerns about conditions in parts of Europe, with a recent cold snap and dry conditions impacting some areas, and new crop milling wheat in France establishing a new contract high. Strategie Grains sees 2020/21 soft wheat exports for the European Union and United Kingdom at 25.4 million tons, up 200,000 from the prior projection, with 2021 production at 129.6 million tons, more than 10 million above 2020. With less than two months left in the 2020/21 marketing year, U.S. wheat export sales were a net reduction and a marketing year low. New crop sales were good. The new marketing year for wheat gets underway June 1^st.