Market News

Soybeans close mixed, bouncing back from early drop

 

Soybeans were narrowly mixed adjusting old crop/ new crop spreads. Contracts rallied after early losses, apparently taking a wait and see attitude towards the trade dispute with China. With no start date for tariffs in place, there’s some sentiment it might be a ploy for leverage in negotiations on the part of Beijing. Brazil doesn’t produce enough beans to meet China’s needs and the interdependence of the U.S. and Chinese economies is strong. The most active contracts posted week to week losses, but maybe not the dramatic losses that some were expecting. Friday, unknown destinations bought a total of 428,000 tons of U.S. beans, with 327,000 tons for 2017/18 delivery and 131,000 for 2018/19, and Mexico purchased a total of 130,632 tons, half for this marketing year and half for next marketing year. Unknown also picked up 20,000 tons of 2017/18 U.S. bean oil. The Buenos Aires Grain Exchange lowered its outlook for Argentina’s bean crop to 38 million tons. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was mostly modestly lower on profit taking and technical selling. Most forecasts have more fieldwork and planting delays in parts of the Midwest, with the USDA’s weekly progress and condition numbers out Monday afternoon. Egypt bought 100,000 tons of 2017/18 U.S. corn Friday morning. Potential tariffs are less of a factor for corn than soybeans as China doesn’t buy a lot of U.S. corn. The May and December contracts effectively ended the week steady to firm. Ethanol futures were higher. U.S. ethanol is also on China’s list of targeted U.S. goods, with Beijing planning to expand their domestic ethanol industry.

The wheat complex was higher on commercial and technical buying, posting solid week to week gains. Minneapolis took the lead Friday, expecting fieldwork and planting delays for spring wheat in the northern U.S. Plains and Canada. Most forecasts have more dry weather in the southwestern Plains and a drier, but cool, pattern in the eastern Midwest. The USDA’s supply and demand update out Tuesday, April 10th at Noon Eastern/11 AM Central is expected to reinforce the bearish fundamental outlook. U.S. wheat is on China’s list of tariff targets, but China doesn’t buy much U.S. wheat and owns about half of the total global supply.