Market News

Soybeans down, waiting for better demand from China

Soybeans were lower on fund and technical selling, giving back Friday’s gains and then some. Beans continue to wait for some solid sign of increased buying interest from China under Phase One of the trade agreement. Weekly export inspections were bullish, mostly to China, but those were previously purchased beans and sales totals the last few weeks have been lackluster. Since the signing of Phase One on the 16^th, no daily sales have been announced by the USDA and China’s Lunar New Year celebration is coming up later this week. Brazil’s harvest is slower than a year ago at 1.8% complete, but the pace should pick up soon in some areas. Other areas are expected to receive excessive rainfall, further delaying harvest activity, while hot, dry weather is becoming an issue in parts of Argentina. Soybean meal and oil followed beans lower.

Corn was modestly lower on profit taking and technical selling, losing a small portion of last Friday’s gains. There’s been some talk of new export demand for U.S. corn from Asia, but nothing has surfaced. The cash basis at the Pacific Northwest was steady to higher Friday, but lower Tuesday and no new sales have been reported. That slow soybean harvest in Brazil could restrict second crop corn planted area. Brazil’s second crop is the larger crop and the source of most of their exports. Corn is also keeping an eye on conditions in Argentina. Weekly export inspections were bearish and the overall 2019/20 pace remains well behind 2018/19. The recent decline in price should help U.S. corn be more competitive on the export market. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. The European Union says corn export sales this marketing year are 12.2 million tons, 6% less than this time last year. Ukraine’s Ag Ministry says marketing year to date corn exports are 14.2 million tons.

The wheat complex was higher on short covering and technical buying. Chicago led the way, pulling Kansas City and Minneapolis modestly higher, with support from the recent higher move in prices for the European Union and Russia. China is also reportedly interested in some types of U.S. wheat, but nothing has surfaced yet for wheat either. Weekly export inspections were down on the week and the year and less than what’s needed to meet USDA projections, but this marketing year’s pace remains ahead of last marketing year. The European Union says 2019/20 soft wheat exports as of July 1^st are 15.7 million tons, up 71% on the year. Ukraine’s Ag Ministry says marketing year to date wheat exports are 15.46 million tons, more than 4 million ahead the previous year. Pakistan’s government has approved the import of 300,000 tons of wheat to staunch rising domestic prices of flour and increase availability. DTN says Japan is tendering for 108,296 tons of food wheat from the U.S. and Canada, while Algeria is in the market for 50,000 tons of wheat.