Market News

Soybeans, wheat finish day with modest gains

Soybeans were modestly higher on short covering and technical buying. Contracts were oversold and due for a bounce but weekly export inspections were bearish and U.S. beans continue to face plenty of competition from South America. Brazil is still selling a lot of beans to China and port issues in Argentina are reportedly clearing up, even as both issues try to staunch the spread of COVID-19. That clear up in Argentina put additional pressure on bean meal. Soybean oil was up on the adjustment of product spreads and spillover from beans. Also, the USDA revised February’s record crush lower. Soybeans are also trying to buy back some U.S. acres from corn ahead of widespread planting. Brazil’s vegetable oils group ABIOVE has that nation’s crop at 120.75 million tons, below most other major projections. The USDA’s attaché for Canada estimates 2019/20 canola production at 18.649 million tons, down from the 20.343 million in 2018/19 on lower planted area and weather issues, and while 2020/21 production is expected to recover to 19 million tons, large supplies and low prices are expected to limit planted area.

Corn was modestly lower on fund and technical selling. Crude oil led corn lower, with OPEC delaying a meeting to discuss reducing production from Monday until Thursday. Corn is also watching South America, along with U.S. conditions ahead of widespread planting. The USDA’s first national 2020 corn planting pace estimate is expected to be out later this month. Weekly export inspections were bullish corn and bearish sorghum, while the supply outlook remains bearish for both crops. Ethanol futures were mostly weak on the lower move in crude oil and concerns about demand.

The wheat complex was modestly higher on short covering and technical buying. Parts of the southern U.S. Plains and the Black Sea region are dry. Sales out of Ukraine are slowing down, consulting firm APK-Inform says sea-based shipments last week were nearly half what they were the week before, and Russia is set to cap grain exports through June. U.S. export inspections were less than what’s needed to meet USDA projections for the marketing year, with less than two months remaining in 2019/20. The USDA says 62% of U.S. winter wheat is rated good to excellent, up 2% from the first rating of 2019, but with a wide range depending on individual state conditions. The USDA’s attaché for India estimates 2020/21 wheat production at 105 million tons, the fourth year in a row with a record high, but that doesn’t fully factor in labor shortages due to quarantines for coronavirus. According to reports, Egypt might move from having supplies price wheat on the cost and freight basis instead of free-on-board as Cairo tries to shore up reserves.