Market News

Soybean futures up ahead of China announcement

Soybeans were sharply higher on speculative and technical buying, cementing a higher week to week close. Beans were waiting to see what resulted in the most recent round of trade negotiations with China. By Friday afternoon, reports had emerged of a partial trade deal between the U.S. and China, confirmed in a White House news concerns, and that Beijing would be buying $40 billion to $50 billion in U.S. farm products. There was more talk of China buying U.S. beans Friday and Thursday’s USDA numbers were bullish, even if that day’s finish wasn’t. Soybean meal and oil followed beans higher. CONAB estimates Brazil’s soybean crop at 120.4 million tons, but planting has been slow because of dry weather. Those conditions are also impacting planting in Argentina and could cause some shift away from corn to beans. The Rosario Grain Exchange sees Argentina’s crop at 51 million tons.

Corn was sharply higher on speculative and technical buying, erasing Thursday’s loss and pulling contracts into a positive weekly finish. The USDA did lower the 2019 production guess, even if it was by less than what was expected heading into the report and the yield outlook was up fractionally. The trade was watching the winter-like storm and rain in the Midwest and Plains, expecting conditions to slow development and harvest even further and cause at least some damage to the crop. Demand uncertainties limited gains, with U.S. prices maintaining a premium to South American and Ukrainian supplies. Ethanol futures were higher. CONAB has Brazil’s first corn crop at 26.3 million tons, up 2.5% on the year. The Rosario Grain Exchange estimates Argentina’s corn crop at 47.5 million tons, down 2.5 million from the last guess, because of weather problems and political uncertainties.

The wheat complex was sharply higher on speculative and technical buying, with Chicago, Kansas City, and Minneapolis all up for the week. Wheat also has weather concerns, expecting more spring wheat harvest delays and quality issues for the U.S. and Canada, along with winter wheat planting delays in some areas. Export demand is good, but there’s plenty of wheat available, with the USDA projecting a record global supply. The USDA did lower production outlooks for Argentina and Australia because of dry weather but raise the estimate for the European Union. The Buenos Aires Grain Exchange now has Argentina’s crop at 19.8 million tons, compared to the previous projection of 21 million, citing weather. The Rosario Grain Exchange estimates Argentina’s wheat crop at 20 million tons, also lower than their prior guess. DTN says Jordan is tendering for 120,000 tons of milling wheat and Tunisia is in the market for 50,000 tons of milling wheat.