Market News

Soybeans eke out slight gain

Soybeans were modestly higher on short covering and technical buying, buying back a small portion of Monday’s losses. The USDA’s national condition rating was down 1% and development is behind the five-year average. Weather forecasts for this week look mixed, much better for some areas than others. Demand is slow, but without China’s tariff, U.S. beans are the world’s most competitively priced after the recent higher move for Brazil. That said – while U.S. export inspections have picked up steam, the 2018/19 pace remains slow with a couple of weeks left in the marketing year. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The USDA’s attaché says Germany’s demand for soybean meal is declining because of lower domestic pork production.

Corn was modestly lower on fund and technical selling. Contracts were up overnight, but unable to follow through, even with the concerns about this year’s crop because of the bearish supply and demand situation. Exports have been slow with increased competition from Argentina, Brazil, and Ukraine, while domestic demand is declining for ethanol use and corn is likely losing some feed share to wheat. The first day of this week’s major crop tour showed lower than expected yield potential in both the Eastern and the Western Corn Belt. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. POET says it is idling one ethanol plant and reducing output at other facilities because of small refinery waivers.

The wheat complex was modestly lower on fund and technical selling. The winter wheat harvest is about to wrap up, while the spring harvest is much slower than average following recent rainfall in the northern U.S. Plains. Export demand is solid but is expected to slow down as the world harvest advances. APK Inform projects Ukraine’s crop at 28 million tons, with export potential of 21 million, both up on the year. Allendale says Algeria will not be buying wheat from Romania because of strict limits on bug damage. The trade is also watching weather in Australia, Canada, the European Union, and the Black Sea region. DTN says Morocco is tendering for 576,000 tons of milling wheat and 345,455 tons of durum, both from the U.S., while Japan is in the market for 110,057 tons of food wheat from the U.S. and/or Canada and Jordan is tendering for 120,000 tons of milling wheat.