Soybeans, corn down on concerns about demand from China
Soybeans were sharply lower on fund and technical selling. Soybean oil was down sharply following last week’s technical reversal and a slowdown in China’s economy is creating concerns about sustained demand. Chinese markets are closed for most of this week due to the Golden Week holiday and there are some lockdowns and port unloading delays due to COVID-19. Soybean meal was mostly lower, adjusting spreads. There have been no deliveries on May soybeans or soybean products, reflecting the bullish fundamentals, including strong domestic crush demand. The USDA says March’s soybean crush was record large at 193 million bushels, up 19 million from February and 5 million from March 2021. The trade is continuing to monitor planting delays in some key U.S. growing areas. The USDA says 8% of U.S. soybeans are planted, compared to the five-year average of 13%. Soybean export inspections were down on the week, but up on the year, primarily to China and Spain. A large shipment of fertilizer from Russia is reportedly heading to Brazil.
Corn was lower on fund and technical selling, but still managed to finish closer to the day’s highs than the lows. Corn is also watching the weather, expecting more planting delays in parts of the Midwest and Plains. That planting pace was expected to be much slower than average in the weekly USDA update, which limited losses, to some extent. As of Sunday, 14% of U.S. corn is planted, compared to 33% on average, with 3% emerged, half of the normal rate. The USDA says corn for ethanol use during March was 454.942 million bushels, up 12% on the month and 8% on the year, with DDGS production at 1,877,838 tons, increases of 11% from February and 4% from March 2021. Corn export inspections were modestly higher than the prior week, lower than a year ago, with China and Colombia leading the way. Corn was also pressured by demand concerns related to China, which has stepped up purchases of U.S. corn with Ukraine mostly out of the market. The USDA’s attaché in Canada estimates corn production at 13.6 million tons, compared to 13.984 million a year ago. Forecasts for central Brazil continue to look mostly dry, stressing the critical second corn crop.
The wheat complex was mixed. Most forecasts have mixed precipitation this week in the dry southern U.S. Plains, pressuring Kansas City. Spring wheat growing areas in the northern Plains should see more near-term planting delays, supporting Minneapolis. Chicago was caught in the middle, spending most of the session adjusting spreads. For winter wheat, 27% of the crop is called good to excellent, unchanged on the week, but 21% below a year ago, with 23% headed, compared to 29% on average. For spring wheat, 19% of spring wheat is planted, compared to 28% usually in early May, with 5% emerged, compared to the five-year average of 7%. Wheat export inspections were above the prior week, but below this time last year, with just about a month remaining in the 2021/22 marketing year. The top destinations were Mexico and the Philippines. The trade continues to monitor the impact of Russia’s invasion of Ukraine on planting and export business. There are reports of Russian troops stealing grain and equipment from Ukraine, while Ukraine’s Ministry of Infrastructure has officially closed four major seaports. Some exports are leaving Ukraine on rail, via Romania. The USDA’s attaché in Canada projects 2022/23 wheat production at 31.58 million tons, compared to 21.652 million for 2021/22, but adds persistent drought in parts of the Canadian Prairies is hampering early planting activity. Exports are expected to be 21.9 million tons this marketing year, compared to 15.6 million last marketing year. The USDA says the amount of wheat ground for flour during the first quarter 2022 was 230.628 million bushels, down 2% from the fourth quarter of 2021, but up 2% from Q1 2021. The total grind for 2021 was 913.38 million bushels, 1% less than 2020.