Market News

Soybeans up after export sale to China

Soybeans were higher on fund and technical buying. China bought 258,000 tons of U.S. beans, 60,000 for 2019/20 and 198,000 for 2020/21, and unknown destinations picked up 216,000 tons of old crop bean meal. That was the first announced sale to China in nearly two weeks and Beijing and Washington D.C. continue to spar over COVID-19, purchases under Phase One of the trade agreement, and other issues. Beans are watching U.S. planting weather, expecting warmer, drier conditions starting later this week for many areas. As of Sunday, 65% of U.S. soybeans are planted, compared to the five-year average of 55%, and 35% have emerged, compared to 27% on average. Weekly export inspections on beans were bearish heading into the final quarter of the marketing year. China’s Customs Ministry says imports from Brazil during April were 5.939 million tons, up on both the month and the year. Soybean meal was mixed on spread adjustments, while oil was up, following the lead of beans and crude oil.

Corn was modestly higher on fund and technical buying. The USDA was expected to report planting at around 90% complete, even after the weekend rain delays and flooding in some areas. The USDA says 88% of U.S. corn is planted, compared to the usual pace of 82%, with 64% of the crop emerged, compared to 58% on average. In the first rating of the season, 70% of U.S. corn is in good to excellent shape with 25% called fair and 5% rated poor to very poor. There was also spillover from a strong move in the broader market, including a big post-Memorial Day jump in the Dow, but gains in corn were limited by demand concerns. Export inspections remain behind what’s needed weekly to meet projections for the current marketing year, ethanol use remains well below a year ago, and there are questions about livestock feed demand. Last week’s USDA Cattle on Feed report showed a big year to year drop in placements and the Quarterly Hogs and Pigs report out in June will be watched very closely. Ethanol futures were higher. Corn is monitoring the spread of COVID-19 in Brazil and the potential impact on corn exports, along with development conditions in Brazil and Argentina.

The wheat complex was mixed, with Chicago down and Kansas City and Minneapolis up. Recent rainfall has been good in parts of the U.S. Plains and European Union but more will be needed and the precipitation missed some of the drier parts of Russia and Ukraine. Reports have new crop prices in Ukraine surging on weather concerns in that part of the world. Early U.S. winter wheat yields have been mixed. For winter wheat, 68% of the crop has headed, compared to 72% on average, with 54% rated good to excellent, 2% more than last week. For spring wheat, 81% of the crop is planted, compared to 90% usually in late May, and 51% has emerged, compared to the five-year average of 90%. The USDA says wheat inspections have passed the level needed to meet projections for the soon-to-end marketing year. Australia’s Bureau of Meteorology says La Nina/El Nino indicators for the southern hemisphere are currently neutral. Egypt’s government says it has purchased 3 million tons of wheat from local producers, out of an expected total of 3.6 million tons.