Market News

Soybeans, corn down on demand questions, outside markets

Soybeans were lower on fund and technical selling. Domestic crush and export demand continue to be strong, but beans were unable to follow through on the early gains, with spillover from the outside markets and soybean meal. Sustained export demand, including from China, is a question mark due to concerns about the global economy. China is likely out of the market until Thursday due to holiday celebrations. Soybeans are also watching the slower than average U.S. planting pace. Soybean oil did finish mixed on bull spreading, with nearby contracts supported by the fundamental outlook for vegetable oils. No one knows how long Indonesia’s palm oil export ban will last and Ukraine is the world’s biggest exporter of sunflower oil.

Corn was lower on fund and technical selling, also unable to follow through on early gains due to outside market influence and demand uncertainties. 14% of U.S. corn is planted, well behind last year and the five-year average, with more mixed progress expected this week. Generally warmer temperatures are in the forecast, but some areas will continue to see rain. More dry weather in central Brazil will impact their critical second crop. Areas of southern Brazil are in comparatively better condition. CONAB’s next set of estimates for Brazil is out May 12^th, along with the USDA’s updated supply and demand outlook. Export demand has improved with Ukraine out of the market and domestic demand is solid, including for ethanol use. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Corn is also waiting to see if China’s interested in buying U.S. corn after returning from this week’s holiday.

The wheat complex was lower on fund and technical selling. Rain is likely in parts of the southern U.S. Plains, helping hard red winter development. Meanwhile, soft red winter growing areas are expected to see a mixed weather pattern over the next couple of weeks. 43% of winter wheat is rated poor to very poor, up 4% on the week, while overall winter wheat development and spring wheat planting remain slower than normal. The U.S. and global wheat markets continue to monitor planting and exports in Ukraine following Russia’s invasion. APK-Inform says Ukraine’s grain storage will be impacted by the slowdown in the export pace, while projecting total grain production at 55.9 million tons. A recent heatwave in India is expected to have some impact in yield, hurting export prospects.