Market News

Soybeans, wheat bounce, still down on week

Soybeans were higher on commercial and technical buying but ended the week with significant losses. Contracts were oversold and due for a bounce, with some help from rallies in soybean meal and oil. First notice day deliveries were reported for May bean oil, but there were no deliveries on May beans or meal. The near-term supply is tight and domestic demand is solid, even if crush margins have narrowed. It’s still a little early to get too concerned about U.S. planting delays, but if delays persist in corn, that could lead to some shift to soybeans. The trade is also watching the tail end of Brazil’s record harvest. As activity draws to a close, Brazil’s basis is bouncing off the recent lows, but near-term export prices continue to general favor Brazil. Argentina’s harvest is just shy of a third of the way complete, with the dismal crop conditions factored in. CONAB’s updated outlook for Brazil is set for May 11^th, with the USDA’s new supply, demand, and production estimates out May 12^th.

Corn was mixed, ending the week in the red. Corn consolidated after the recent drop, watching U.S. planting and development weather, with no deliveries reported on the first notice day for the May contract. More near-term delays are probable in parts of the region ahead of a generally drier pattern. Still, temperatures for next week look cooler than ideal in key growing areas of the Corn Belt. The USDA’s weekly crop progress and condition numbers are out Monday at 4 Eastern/3 Central. Corn is also monitoring several other items, including development weather in Brazil, with mostly good conditions ahead of a seasonal shift to drier conditions and the export pace out of the Black Sea region ahead of the anticipated end of the grain trade agreement between Russia and Ukraine. China’s recent cancellations of U.S. corn can be linked to trade with Ukraine and anticipation of a record second crop harvest in Brazil.

The wheat complex was higher on commercial and technical buying, lessening some of the week’s bearishness. Traders bought back part of the recent losses, with much of the week’s rain in the southern Plains mostly too late to help. Most forecasts have an improvement for spring wheat planting conditions in the northern Plains, but that’s after flooding ends in portions of the region. Chicago wheat out of the Gulf is now the most competitively priced on the export market, which could help spark improved demand for U.S. wheat. That could partially depend on the fate of the Black Sea Grain Initiative, which is expected to come to an end May 18^th. Russia is pushing for some big concessions even as it continues the war in Ukraine. First notice day deliveries were heavy for May Chicago, lighter for May Minneapolis, and non-existent for May Kansas City.