Market News

Soybeans, corn, wheat up ahead of USDA numbers

Soybeans were sharply higher on commercial and technical buying. Harvest activity in Brazil continues to be slower than average because of rain, while most of Argentina is expected to see a drier near-term pattern. Safras e Mercado says 3.4% of Brazil’s bean crop is harvested, compared to 12.6% on average. The USDA will be releasing updated South American production estimates Tuesday at Noon Eastern/11 Central in the monthly supply and demand report. Ahead of the report, U.S. and world soybean stocks should be down from January. Weekly soybean export inspections were bullish, with China and the Netherlands taking the lead. The pace for inspections remains ahead of what’s needed to meet USDA projections for the current marketing year, even as sales, at least announced sales, have slowed somewhat. Soybean meal and oil were supported by commercial demand.

Corn was sharply higher on commercial and technical buying. Corn is also watching South America, especially the second crop corn planting delays in Brazil because of the soybean harvest delays. That is the biggest of Brazil’s three crops and the source of most of their exports. Safras e Mercado says 8.2% of Mato Grosso’s second crop is planted, compared to 33% on average. Also, the potential stress in Argentina comes at critical stages of development. Demand is solid and the USDA is expected to tighten U.S. ending stocks Tuesday and could also lower the global projection. Corn export inspections were up on the week and the year, China and Mexico topped the list, while sorghum was well above a year ago, all to China. Ukraine’s Ministry of the Economy says it will cap corn export sales at 24 million tons through the end of the marketing year, June 30^th. Overall, Ukraine’s grain exports are down 20.5% on the year. Ethanol futures were unchanged.

The wheat complex was solidly higher on speculative and technical buying. Drought conditions are the big concern in the U.S. Plains and winterkill could be an issue in parts of the U.S. and the Black Sea region. The trade is also monitoring overwintering conditions in the European Union, conditions ahead of spring wheat planting, harvest activity in Australia, and stepped-up sales by Russian producers ahead of export taxes going into place. Those stepped-up sales have pressured wheat prices in both Russia and Ukraine. The global supply fundamentals remain bearish, with most analysts expecting slight month to month declines for U.S. and world ending stocks Tuesday. Export inspections were bearish, with Mexico and the Philippines the leading weekly destinations. DTN says Japan is tendering for 86,845 tons of food wheat from the U.S. and Canada and the Philippines is in the market for 230,000 tons of optional origin feed wheat.