Market News

Soybeans, corn lower, expecting better planting weather

Soybeans were sharply lower on fund and technical selling and, overall, losing ground for the week. Most forecasts had improved planting weather in much of the U.S. in the coming week. Soybean products were mostly lower and crush margins have tightened a little recently but remain in positive territory. The trade is also monitoring the spread of COVID in China and lockdowns delaying unloading of ships. The USDA’s attaché for Malaysia estimates 2022/23 palm oil production at 19.5 million tons, which would be up from 2021/22. Exports this marketing year are expected to be 16.45 million tons, compared to 16.5 million last marketing year. Malaysian palm oil futures were lower ahead of Friday’s U.S. session. Safras e Mercado has Brazil’s 2021/22 soybean crop at 122.3 million tons, compared to the previous guess of 125.08 million. The Buenos Aires Grain Exchange says 54.7% of Argentina’s soybean crop is harvested, holding the projection at 42 million tons, with 12% rated good to excellent. Statistics Canada says that canola stocks on March 31^st, 2022 were the tightest since 2005 at 3.94 million tons, much lower than expected and down 49.3% on the year due to drought in some key growing areas. Soybean stocks in Canada were 2.014 million tons, 0.1% higher. China’s National Grain Trade Center says it will put 314,000 tons of previously imported soybeans up for auction May 13^th, less than previous offerings.

Corn was sharply lower on fund and technical selling, cementing a lower weekly finishes for old and new crop contracts. Corn is also watching U.S. planting weather, expecting better progress in most of the Corn Belt. Large portions of central Brazil remain dry, stressing their critical second corn crop, while conditions in southern Brazil are comparatively better. Safras e Mercado sees 2021/22 total corn production in Brazil at 118.13 million tons, compared to the prior projection of 118.16 million, with the second crop at 83.25 million tons, compared to the previous estimate of 84.58 million tons. Updated outlooks for CONAB and the USDA are scheduled for Thursday the 12^th. The Buenos Aires Grain Exchange says 25% of Argentina’s corn crop is harvested, with production expected to be 49 million tons, unchanged from the last projection, and 16% of the crop is in good to excellent condition. France’s AgriMer says 84% of France’s corn crop is planted, slightly behind the year ago pace. Statistics Canada says domestic corn stocks on March 31^st were 9.282 million tons, up 13.9% from the previous year, due in part to increased imports.

The wheat complex was mixed, with the most active months still posting strong week-to-week gains. Chicago was up modestly Friday on excessively wet conditions in parts of the eastern Midwest, while Kansas City was down on profit taking and Minneapolis consolidated. The trade is also watching planting in Ukraine, which is impacted by Russia’s invasion, and weather in India, with hot temperatures driving down yields. Russia’s invasion of Ukraine is also halting exports, with the U.N.’s Food and Agriculture Organization reporting almost 25 million tons of grain have been stuck in Ukraine due to the fighting and Black Sea port damage. SovEcon sees Russia’s 2021/22 wheat exports at 34.1 million tons, up 200,000 from the last guess. The Russian Grain Union has production at a record large 87 million tons, 64 million of that winter wheat. France’s AgriMer says 89% of France’s crop is in good to excellent condition, 2% less than the prior week, but 10% more than a year ago. Statistics Canada says wheat stocks at the end of March were the tightest since 1989 at 10.103 million tons, under the pre-report guess and 38.7% smaller than a year ago, hit hard by drought in the Prairies and higher domestic feed and food use. The Buenos Aires Grain Exchange expects a decline in wheat acreage for Argentina due to fertilizer issues, with 4% of the crop planted.