Market News

Soybeans, wheat mixed, corn down ahead of USDA reports

Soybeans were mixed, adjusting spreads. The trade was preparing for Friday’s USDA reports, expecting tighter quarterly stocks and an increase in planted area. The numbers are out at Noon Eastern/11 Central. The trade is keeping an eye out for any corn planting delays that could eventually switch acres to soybeans. Export sales were up on the week, mainly to China and the Netherlands, but with a cancellation by unknown destinations and the pace of sales continues to reflect Brazil’s dominance of the global market. Brazil and China have reportedly agreed to trade in their own respective currencies, instead of the dollar. Soybean meal was higher and bean oil was lower, adjusting product spreads while reacting to the USDA export sales numbers. There was also some profit taking interest in bean oil despite the higher close in crude oil. Brazil’s harvest is ongoing with sentiment that Brazil could account for half of Argentina’s soybean imports this marketing year, potentially 5 million tons. Argentina is normally the world’s biggest exporter of soybean products and has been hit hard by drought. Argentine grain inspectors are scheduled to go on strike late this week.

Corn was modestly lower on profit taking and technical selling, unable to break through overhead resistance. Analysts expect the USDA to show higher planted area against lower than a year ago quarterly stocks. Early planting delays are possible. China bought more U.S. corn Thursday, but while weekly sales were over a million tons, they were down sharply from the previous week’s marketing year high. Last week’s leading buyers were China and Japan, with a cancellation by unknown. Thursday’s sale to China was the 12^th announced sale in the last 13 business days, 11 of those directly to China, for a running total of 3,382,800 tons, all for 2022/23 delivery. That’s helping to make up for the slow demand during the first half of the marketing year, but shipments are really going to have to pick up steam. Corn is also monitoring second crop planting in Brazil and the dire production prospects in Argentina. The USDA’s next round of supply and demand estimates is out April 11^th, with updated projections from CONAB for Brazil due April 13^th.

The wheat complex was mixed, with Chicago down, Kansas City firm, and Minneapolis modestly higher. The USDA is expected to show an increase in planted area for all types of wheat with quarterly stocks down on the year. That spring wheat area number could come down with planting delays probable in parts of the northern U.S. Plains and Canada. Weekly old crop sales numbers were bearish, falling below the four-week average, with Mexico and the Philippines topping the list. With less than a quarter left in 2022/23, sales continue to trail 2021/22. There’s talk that Russia intends to nationalize their export business, which seems increasingly likely if western companies continue to withdraw from business with Moscow due to the sustained aggression in Ukraine. That nationalization might not even be official, but could result from Russian oligarchs purchasing the remaining trade infrastructure. Turkey reportedly bought 395,000 tons of wheat out of an initial tender for 695,000 tons.