Market News

Soybeans, corn establish new highs

Soybeans were higher on commercial and technical buying, notching a fresh round of contract highs. The near-term U.S. supply remains tight and domestic demand continues to be strong, even if export demand has lessened to a degree as Brazil’s harvest has advanced. Even with that relative slowdown, soybean exports are on pace to meet or exceed USDA projections for the current marketing year and calendar year 2021 sales are expected to top the strong 2020 total, all largely driven by demand from China. China’s customs data for March shows U.S. soybean imports at 7.18 million tons, mainly because of the slow shipping pace out of Brazil that month, with Brazil only accounting for 315,334 tons. Brazil has reportedly suspended import duties on soybeans, soybean meal, and soybean oil because of high global prices. There was also another round of support from strong global vegetable oil demand, including U.S. soybean oil futures. Bean meal followed beans and oil higher. It’s early, but near-term U.S. planting delays are probable.

Corn was higher on commercial and technical buying, making new highs for the move. Corn is also looking at a tight near-term supply and solid domestic demand, along with dry weather impacting Brazil’s second corn crop. There’s talk the conditions will lower yields by a significant amount, which would likely open up some new U.S. export business. Brazil will reportedly suspend corn import duties until the end of the year, citing high global prices. Near-term U.S. planting delays, and even some replanting, are probable because of colder than normal temperatures and even snow in parts of the Midwest and Plains. Customs data from China pegs January through March corn imports at 6.73 million tons, considerably larger than during the first quarter of 2020. The USDA says Mexico bought 114,300 tons of old crop U.S. corn ahead of the open. Just over halfway through the marketing year, Mexico is the second biggest buyer of U.S. corn, after China and ahead of Japan. APK-Inform sees Ukraine’s 2021 corn crop at 35.71 million tons, compared to 29.5 million in 2020. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was higher on commercial and technical buying. Freeze damage is possible in some winter wheat growing areas, while spring wheat areas are expected to remain mostly dry. Improved soil moisture conditions will benefit the winter wheat crop, but longer-term outlooks are uncertain, and that precipitation will miss some of the central and southern Plains. There are also concerns about dry weather in parts of Europe. France’s AgriMer says 86% of that nation’s soft wheat crop is in good to excellent condition, down 1% on the week. The USDA’s next set of global production projections are out May 12^th, in the regular monthly supply and demand report. The Buenos Aires Grain Exchange expects Argentina’s 2021/22 wheat acreage to be steady with 2020/21. Argentina is an exporter of wheat, mainly to other Mercosur trading bloc nations, especially Brazil. APK-Inform estimates Ukraine’s wheat crop at 37.6 million tons, compared to 25.5 million a year ago, with grain exports projected at 54.2 million tons, up nearly 10 million on the year. That export flow could be disrupted by tensions with Russia. DTN says Japan is tendering for 85,110 tons of food wheat from the U.S. and/or Canada.