Market News

Soybeans up on China talk, but questions linger

Soybeans were modestly higher on commercial and technical buying. There’s more optimism about a U.S./China trade deal, but details are scarce, pulling contracts down from the highs. More talks between the world’s two largest economies are expected later this month. Crop conditions look non-threatening to favorable for most of South America. Both Argentina and Brazil are expected to produce very large crops, further limiting U.S. export competitiveness. The International Grains Council expects Brazil to export 7 million tons of beans this month. China did show up in the weekly export inspections report, but there haven’t been any purchases announced by the USDA recently. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly higher on commercial and technical buying. Corn is also waiting to see what happens with China, while watching weather in South America. Most of the Midwest is bitterly cold and wet, furthering concerns about planting delays, with the USDA’s prospective planting report out on the 29th. Most analysts do expect at least some year to year increase in U.S, corn acreage, but that increase could be limited by weather. Colombia bought 100,500 tons of 2018/19 U.S. corn, but rumored sales to China haven’t shown up, at least yet. Beijing is also reportedly interested in U.S. ethanol, DDGS, and sorghum. Ethanol futures were steady to firm.

The wheat complex was modestly lower on fund and technical selling. Many winter wheat growing areas are very cold, but most have adequate snow cover, limiting the concerns about winterkill. A cold start to spring could have an impact on spring wheat planting, but that seems to be on the back burner. The fundamental outlook continues to be bearish, with a big world supply and slow export demand for U.S. wheat. New USDA supply and demand estimates are out Friday. Weekly export inspections were bearish, with roughly a quarter left in the 2018/19 marketing year. DTN says Saudi Arabia bought 625,000 tons of wheat from an “unknown origin” and Algeria is tendering for 50,000 tons of durum.