Market News

Soybeans, corn buy back some losses

Soybeans were modestly higher on fund and technical buying. Beans saw an oversold bounce, with some help from soybean oil and strong crush margins. Soybean meal was down on demand related product spread adjustments. U.S. soybean planting is slower than average but should pick up steam in many areas over the next few days. There’s still some talk of switching acres from corn to soybeans in parts of the region, but no confirmation. Soybean oil was able to shrug off the losses in crude oil and palm oil, which dropped on larger than expected supplies in Malaysia. Malaysia’s commodities ministry is reportedly proposing cutting the nation’s export tax from 8% to 4% to 6% to lower supplies and boost trade. Part of the bullishness surrounding world vegetable oil trade is Russia’s invasion of Ukraine impacting the planting and exports of sunflower seed and oil.

Corn was modestly higher on fund and technical buying. Corn was also oversold and watching the weather, expecting much better planting progress this week in most of the region. Planting is quite a bit behind average due to wet, cool conditions in some areas during late April and early May, and while portions of the Midwest and Plains will see more rain this week, other areas should be dry. Hot, dry weather is impacting yield potential for second crop corn in central Brazil. AgRural lowered their projection for Brazil to 112.3 million tons, 5 million less than the prior guess. CONAB’s updated outlook for Brazil and the USDA’s new set of supply, demand, and production numbers are both out Thursday. Export demand has picked up steam with increased demand from China due to Ukraine’s absence from the market, while domestic demand for ethanol use continues to be solid. The USDA’s weekly ethanol production and stocks report is out Wednesday.

The wheat complex was mostly higher. Minneapolis was up on the slow spring planting pace, with more rain in the forecast for parts of the northern U.S. Plains. Chicago was steady to firm and Kansas City was higher, with uncertainties about winter wheat development conditions. For soft red winter, the big issue is excessively wet weather in some areas, while hard red winter is focused on drought or near drought conditions in much of the southern U.S. Plains. Globally, the trade is monitoring the weather impacts in India and Europe, along with conditions in Argentina, Australia, and Canada. Those concerns and unknowns combined with the expectation for a big acreage reduction in Ukraine caused by Russia’s invasion have wheat looking at a neutral to bullish supply and demand situation.

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