Market News

Soybeans fail to rally, corn closes mixed

Soybeans were lower on fund and technical selling. Beans tried to rally, but hit resistance and couldn’t follow through, with soybean meal and oil also turning lower on renewed liquidation. Brazil’s record harvest is wrapping up, with expectations for record exports this month and next month. New numbers for Brazil from CONAB are out May 11^th, with updated USDA supply and demand numbers scheduled for the following day. Losses in Argentina appear to be dialed in. Stateside, the USDA says 9% of U.S. soybeans are planted, compared to the five-year average of 4%. There are concerns about freeze damage for early planted beans in parts of the Midwest. Export inspections were the lowest since early this marketing year, but the overall pace remains ahead of what’s needed to meet expectations for 2022/23, with China and Japan leading the way. Statistics Canada’s planted area estimate is expected to show a slight year-to-year increase in planted area for both canola and soybeans.

Corn was mixed on bear spreading. Forecasts generally have wet, cool conditions in parts of the Corn Belt, extending planting delays in those areas. As of Sunday, 14% of U.S. corn is planted, compared to 11% on average, and 3% has emerged, compared to 2% normally in late April. It remains to be seen if any newly emerged corn was damaged by this past week’s frost/freeze events. Corn is also monitoring second crop development weather in Brazil ahead of a turn to a seasonally drier pattern and the dire prospects for Argentina’s crop. China canceled on 327,000 tons of previously purchased old crop U.S. corn. Export inspections were down on the week and the year, with the pace behind what’s needed to meet USDA projections for the current marketing year. The main destinations were Japan and Mexico. Aside from a spate of sales to China, some of which have now been canceled, the expectations for a significant improvement in U.S. corn demand has not materialized.

The wheat complex was lower on fund and technical selling. Rain is in the forecast for the southern U.S. Plains, but it’s too late to help all that much, with hard red winter in historically poor shape. Some freeze damage is likely in portions of the hard red and soft red winter regions, while planting delays in the northern Plains are factor for spring wheat. Still, slow demand and liquidation interest canceled out any weather concerns. For winter wheat, 23% of the crop is called good to excellent, 1% lower than last week, and 18% has headed, compared to 14% on average. For spring wheat, 5% is planted, compared to the five-year average of 12%, and 1% has emerged, compared to the typical pace of 3%. Statistics Canada’s planted area numbers are out Wednesday, with analysts projecting all wheat at 26.3 million acres, including spring wheat at 18.9 million, both of which would be up on the year. U.S. export inspections last week were above the prior week and a year ago, and with just over a month remaining in 2022/23, the pace is on track to meet USDA expectations. Last week’s leading destinations were the Philippines and Taiwan. It’s looking increasingly likely the Black Sea Grain Initiative will not be extended in May due to Moscow’s complaints about the deal and requests for the end of sanctions, despite the continued attacks on Ukraine.