Market News

Soybeans up, corn down with muted response to USDA numbers

 

Soybeans were modestly higher on commercial and technical buying. Ending stocks were down from March and unknown destinations, Argentina, and China all bought U.S. beans Tuesday morning, 279,000 tons, 120,000 tons, and 132,000 tons, respectively. China’s President says that nation intends to improve intellectual property rights for foreign companies, potentially easing some trade dispute concerns. Those are all nominally positive, but the trade probably wants to see some actual movement in tariff talks and even if the UDSA did lower the production outlook for Argentina, they expect a record crop from Brazil. According to wire reports, China’s domestic soybean market is concerned about tariffs on U.S. beans, pushing bean prices and domestic crush margins higher. Soybean meal was lower and bean oil was higher, adjusting product spreads.

Corn was modestly lower on profit taking and technical selling. The U.S. ending stocks estimate was up on the month, but by a little bit less than what some analysts were expecting. 2% of U.S. corn is planted, compared to 3% a year ago and 2% on average. It is still early to get concerned with delays, but many forecasts show a return to cool, wet conditions in parts of the Midwest late this week or early next weekend, continuing to limit activity. Ethanol futures were higher, with the U.S. Energy Information Administration’s weekly production and stocks numbers out Wednesday. The USDA lowered production outlooks for both Argentina and Brazil.

The wheat complex was mixed, with Chicago up, Kansas City mostly weak, and Minneapolis nearly unchanged. The USDA’s condition rating for winter wheat declined last week and spring planting is slower than average. Nothing’s really changed substantially for U.S. weather forecasts, including forecasts for dry conditions in the southwestern Plains and more planting delays in the northern U.S. Plains and Canada. The fundamental outlook remains bearish, with U.S. and world ending stocks both up on the month, which should continue to limit the upside. Japan is tendering for 128,543 tons of food wheat from the U.S., Australia, and/or Canada.