Market News

Soybeans drop ahead of China talks

Soybeans were lower on fund and technical selling. The trade is waiting to see what happens with China as face to face Cabinet-level negotiations resume Thursday. Big questions heading into the meeting are the impact of African swine fever on demand and intellectual property concerns. Beans are also waiting for widespread U.S. planting with the USDA’s intentions report out Friday. Early expectations are for at least some shift away from corn and spring wheat to beans. The trade is also watching development and harvest conditions in Argentina and Brazil. Soybean meal was lower, with a near three year low in the May contract, and bean oil was higher on the adjustment of product spreads. According to Allendale, China has expanded it’s ban on Canadian canola imports as part of a trade dispute.

Corn was lower on fund and technical selling. Corn is also waiting for the talks with China and watching weather ahead of widespread planting. Delays are expected and the prospective planting numbers are expected to have a minimal impact because of the weather issues since March 1st. Weekly ethanol production was down because of recent flooding, the weekly average was the lowest since February, but stocks hit an all-time high for the second week in a row at 24.448 million barrels. Ethanol futures were lower. The industry continues to wait for the end of the comment period on year-round E15 use and to see if China is actually interested in buying U.S. ethanol. DDGS and sorghum are also potential purchase targets for Beijing. The Renewable Fuels Association says U.S. ethanol exports for January were 127.9 million gallons, down on the month, but up on the year. The top destination was Brazil.

The wheat complex was modestly higher on short covering and technical buying. The fundamental outlook remains bearish but contracts were due for a bounce and there are weather concerns for winter and spring wheat. Excessive moisture has had at least some effect on winter wheat in some areas and spring wheat planting delays are probable in the northern Plains. The USDA’s quarterly grain stocks numbers are also out Friday at Noon Eastern/11 Central. The totals are as of March 1st, marketing the last quarter of 2018/19 for wheat and the halfway point of the marketing year for corn and soybeans. Egypt bought 120,000 tons of U.S. milling wheat. Egypt is the world’s biggest buyer of wheat and has recently turned away from some traditional suppliers because of quality concerns. New USDA supply and demand estimates are out April 9th.