Wheat finishes week strong
Soybeans were higher on short covering and technical buying, pulling contracts to a weekly gain. Beans and bean oil had some help from the broader market, especially crude oil, and global vegetable oils. Soybean meal futures finished Friday mixed on bull spreading. U.S. planting is ongoing, while Brazil’s record harvest is nearly over and Argentina’s much smaller harvest is a third complete. Brazil continues to control the export market, but there are issues with transportation to ports and storage. CONAB’s updated outlook for Brazil’s crop is out on the 11th, with new USDA supply and demand numbers on the 12th. The crop loss in Argentina has not led to the expected bump in export demand for U.S. soybean products. Argentina is usually the world’s biggest exporter of soybean meal and oil.
Corn was higher on short covering and technical buying, cementing a higher weekly finish. Corn saw also had spillover support from wheat and the broader market while watching U.S. planting and development weather. Demand continues to be mixed, with near steady ethanol use and slower export demand. Conditions are mostly favorable, with scattered rain in the near-term forecast. Still, that could miss some of the drier portions of the region, with some areas expected to see warmer temperatures in the coming week. Corn is also watching development conditions for Brazil’s potentially record large second corn crop. That record crop and the potential for an early harvest have limited what was expected to be improved export demand for U.S. corn. The recent cancellations by China led to not just a marketing year low for U.S. corn in the most recent export sales report, but an all-time low for any week. The USDA might lower its export outlook in the next round of supply and demand numbers.
The wheat complex was sharply higher on short covering and technical buying, with the most active contracts in all three pits seeing solid weekly closes. A lot of the support was tied to expectations the Black Sea Grain Initiative will not be renewed. Friday’s negotiations between Russia and Ukraine had no reported progress as the war between the two nations escalates. The current version of the deal is set to expire May 18th. That could help export demand for U.S. wheat, especially soft red winter, which is currently the most competitive. Conditions have improved in parts of the southern Plains, but drought is ongoing, with a major hard red winter crop tour starting the 15th. Soft red winter conditions are comparatively good. Spring wheat planting in the northern Plains is off to a slow start but should be able to pick up steam soon. It’s early, but continued drought in parts of Argentina could limit wheat planting.