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Soybeans up despite demand questions

Soybeans were modestly higher on commercial and technical buying, following through on Wednesday’s gains. China was the big buyer of U.S. beans last week, but it was a routine amount compared to many expectations and total sales were near the low end of estimates. Questions about demand from China continue, with another spike in coronavirus reports and a lot of competition from Brazil because of their ongoing harvest and recent drop in their currency. Treasury Secretary Steven Mnuchin did acknowledge this week coronavirus has slowed down implementation of the Phase One trade agreement between the U.S. and China. Egypt also purchased more than 100,000 tons of U.S. beans last week. Soybean meal was higher and bean oil was lower on spread adjustments. Bean oil had additional pressure from a sharply lower move in palm oil ahead of the U.S. session, along with signs of declining vegetable oil demand from India. The Rosario Grain Exchange raised its’ outlook for Argentina’s soybean crop 1 million tons to 55 million. Argentina is the world’s biggest exporter of soybean meal. DTN says South Korea bought “at least” 60,000 tons of optional origin soybean meal.

Corn was lower on profit taking and technical selling. Corn exports backed off from the recent highs and this marketing year remains behind last marketing year by a significant margin. Conditions look good in most of South America, with the USDA projecting a big crop in Argentina and record production for Brazil. The Rosario Grain Exchange now has Argentina’s crop at 50 million tons, up 1 million from their prior projection. Argentina, Brazil, and Ukraine have all become significant competitors on the corn export market for the United States. Ethanol futures were mixed. South Korea reportedly purchased more than 260,000 tons of optional origin corn.

The wheat complex was modestly lower on profit taking and technical selling. Weekly wheat export numbers were neutral and the supply outlook remains bearish, with the USDA projecting a record world supply with just over a quarter left in marketing year. With the recent rally led by Chicago, wheat has lost most of the competitive price advantage it held earlier in 2019/20. Winter wheat conditions are mixed, better for hard red than soft red with both crops currently dormant. The trade is also watching weather ahead of spreading wheat planting in the northern U.S. Plains. The next round of monthly state crop and weather updates from the USDA are scheduled for the week of the 24th and weekly crop progress and condition reports resume in April. South Korea reportedly bought 67,000 tons of optional origin feed wheat. Strategie Grains has European Union soft wheat production at 138.6 million tons and projects Russia at 82 million tons.

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