Market News

Soybeans, corn bounce back

Soybeans were modestly higher on short covering and technical buying. Contracts rallied after early mixed trade on the broader market and talk of new demand from China. Deferred months were up for most of the session, trying to buy some acreage from corn ahead of widespread U.S. planting. The USDA’s Prospective Planting and Quarterly Stocks numbers are still scheduled for the 31^st. Brazil’s harvest is 68% complete and a strike by grain receivers in Argentina has reportedly been postponed. Shipping out of Argentina is reportedly “normal” for now, but there are some delays out of Brazil because of a lockdown at a major hub in Mato Grosso as officials try to stem the spread of coronavirus. Soybean meal was mostly lower on that news from Argentina, spread trade, and profit taking, but bean oil was up on technical buying and the firm move in crude oil.

Corn was modestly higher on short covering and technical buying, along with spillover from the broader market, rallying after early losses. In the broader market, crude oil was up modestly, while the equities roared back on hopes Congress will reach a deal on a stimulus bill. That included a more than 2,000-point gain in the Dow Jones Industrial Average. Corn was also watching crop conditions in and shipping out of Argentina and Brazil, with talk of new interest from China. Allendale says 52% of Brazil’s first corn crop is harvested with second crop planting at 90%, and Argentina’s corn harvest is at 11%. China’s Heilongjiang province says it will increase subsidies for corn growers, the second year in a row with a rise. Ethanol is a concern because of poor margins with some plants cutting output. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Any cuts or idling this week won’t show up until next week’s report.

The wheat complex was mixed, mostly modestly higher. Kansas City and Minneapolis were supported by solid domestic demand as grocery stores make sure shelves are stocked. Chicago was mostly weak on spread trade and profit taking. Overall, the complex was down early on losses in Paris milling wheat futures heading into the U.S. session and continued competitive advantage for Russian wheat after the drop in the ruble. For now, Moscow is not suspending wheat exports, despite the faster than expected pace in sales. The USDA says hard red winter wheat crop conditions improved over the past week, with weekly national crop reports set to resume early next month. APK-Inform says part of Ukraine’s winter crops could be damaged by a late frost. DTN says Taiwan is tendering for 99,450 tons of U.S. milling wheat.