Soybeans, corn, wheat up Monday
Soybeans were higher on commercial and technical buying. Interior cash basis levels are firm to strong, reflecting the tight supplies and solid demand. A move to a cooler, wetter pattern should delay fieldwork and planting in some areas. The USDA says 4% of U.S. soybeans are planted, compared to the five-year average of 1%. Soybean export inspections were down on the week and the year, but the pace remains ahead of what’s needed to meet projections. The main destinations were China and Germany. Beans continue to keep an eye on the tail end of Brazil’s harvest and dwindling expectations for Argentina. The USDA’s attaché in Argentina pegs production at 23.9 million tons and expects Buenos Aires to import as much as 11 million tons of soybeans this year to meet a lowered crush guess. China’s Ministry of Agriculture says it will reduce the amount of soybean meal in feed rations over the next three years to cut back on imports. Soybean meal and oil were higher on commercial support. The NOPA member crush numbers were bullish, with a total of 185.81 million bushels, compared to the estimate of 183.4 million, and soybean oil stocks lower than expected.
Corn was higher on fund and technical buying. Corn is watching planting conditions, expecting near-term delays in parts of the Corn Belt over the next few days. As of Sunday, 8% of U.S. corn is planted, compared to 5% on average. There is a significant risk for flooding in parts of the region as the northern snowpack melts and moves downriver. There’s some rain in the forecast for parts of Brazil, helping the second crop ahead of a turn to drier weather next month. For now, Brazil is on pace for record corn production, driven by that critical second crop. The trade is also monitoring drought conditions in Argentina that have dramatically impacted production. The USDA’s next round of supply, demand, and production numbers is out May 12th. U.S. corn export inspections were above a week ago and a year ago, primarily to Mexico and Japan, but while the pace has picked up in recent weeks, it remains slower than what’s needed to meet USDA estimates for the current marketing year, which runs through the end of August.
The wheat complex was higher on fund and technical buying. Russia is indicating it will not support an extension of the Black Sea Grain Initiative unless there are some concessions to Moscow and has also slowed down inspections of Ukrainian vessels trying to leave the Black Sea. If the agreement does end, it remains to be seen how much that would actually benefit U.S. sales. An alternative framework to ensure Ukrainian business is possible, but how effective that alternative framework would be without Russian cooperation is the big question. Ukraine is also contending with new or potential import bans from nations in central and eastern Europe trying to prop up their own domestic grain trade. The U.S. winter wheat crop is in poor shape and there are spring wheat planting delays, with the potential for more on the way. For winter wheat, 27% of the crop is rated good to excellent, unchanged, with 39% poor to very poor, up 2%, and 10% headed, compared to the normal rate of 8%. For spring wheat, 3% of the crop is planted, compared to 7% normally in mid-April. U.S. wheat inspections were below last week and last year, with Mexico and Thailand topping the list. The pace is basically on track to meet USDA projections for the current marketing year, which lasts through the end of May.