Market News

Soybeans up, still waiting for China

Soybeans were modestly higher on short covering and technical buying. Contracts were down early on profit taking but bounced back while waiting for clarity on trade talks with China. No date has been set for face to face meetings and while there have been new U.S. soybean sales to China, totals have fallen short of expected amounts. Brazil is reportedly studying how it would be impacted by a resumption of full U.S./China trade. Conditions for most of South America look favorable for development and harvest activity. The Buenos Aires Grain Exchange has Argentina’s crop at 53 million tons. Soybean meal was higher and bean oil was weak on the adjustment of product spreads. Beans are also waiting to see what happens with corn planting and how it might impact this year’s acreage. Monthly member crush numbers are out Friday, with the average guess at 158.73 million bushels, a potential record for February.

Corn was fractionally higher on short covering and technical buying following a two-sided session. Corn is also waiting to see what happens with China while watching weather in South America. Stateside, planting delays are probable in parts of the Midwest and Plains. Most near-term forecasts have more snow and rain and temperatures are expected to remain cooler than normal for most of the region, potentially limiting the anticipated expansion of U.S. acreage. Ethanol futures were higher, probably encouraged by Tuesday’s EPA announcement. The U.S. Energy Information Administration says ethanol production last week averaged 1.005 million barrels a day, down 19,000, and stocks dropped 530,000 barrels to 23.731 million.

The wheat complex was lower on profit taking and technical selling, giving back part of the gains made Tuesday. The fundamentals are bearish as export demand continues to be slow and there’s plenty of wheat available globally. USDA’s prospective planting and quarterly stocks numbers are out on the 29th, and new supply and demand numbers are due April 9th. South Korea is tendering for 80,800 tons of milling wheat from the U.S. and Australia. According to wire reports, demand in Asia for old crop wheat from the Black Sea region has increased unexpectedly, keeping U.S. sales slower than anticipated. Argentina initially replaced some of Australia’s Asian market share ahead of the pick-up in sales for Russia and Ukraine. The USDA’s attaché in India has 2018/19 wheat production at 99.7 million tons, compared to 98.51 million for 2017/18.