Market News

Wheat leads on India export ban

Soybeans were higher on commercial and technical buying. Crush and export demand remain strong, with the domestic supply projected to be near multi-year lows. Planting was expected to remain slower than average in the weekly USDA update. The USDA says 30% of U.S. soybeans are planted, compared to the five-year average of 39%, with 9% emerged, compared to 12% on average. Soybean meal was higher and bean oil was lower on product spread trade. Those losses in oil were despite strong global vegetable oil demand. The Solvent Extractors Association of India says palm oil imports for April were 572,508 tons, a six-month high, but below year ago levels. Global vegetable oil prices have been pushed higher by a number of factors, including Russia’s invasion halting Ukraine’s sunflower oil exports. The NOPA says member firms crushed 169.8 million bushels of beans in April, below expectations, but above a year ago. Safras e Mercado projects Brazil’s soybean exports at 74.5 million tons, compared to the previous guess of 78 million. China remains somewhat of a question mark due to COVID lockdowns and unloading delays at port. Export inspections were up on the week and the year, mainly to Egypt and Indonesia.

Corn was sharply higher on commercial and technical buying, in addition to the strength in wheat, pulling the December contract to a fresh high. Corn was also watching U.S. planting conditions, while expecting solid progress in most of the Midwest and Plains. As of Sunday, 49% of U.S. corn is planted, compared to 67% on average, with 14% emerged, compared to 32% normally in mid-May. Parts of Brazil got some rain over the weekend, but not enough to break the drought, and portions of Brazil could see crop damage from a frost. Brazil’s second crop is the largest of the three and the source of most of their exports. Corn is also watching planting in Ukraine, which has been a big supplier of corn to the export market, especially to China. Recent rainfall in parts of France will help crops, but more will be needed for those crops to reach full potential. Export inspections were above a million tons, but below last week and last year, with South Korea and Mexico taking the lead. Domestically, ethanol margins are also supportive for corn.

The wheat complex was sharply higher on commercial and technical buying, with nearby months limit up in Chicago, Kansas City, and Minneapolis. India’s government says it will ban wheat exports starting in July due to a heat wave impairing production, a reversal of earlier policy, compounding the issues surrounding the global supply. India had filled some of the vacuum left by the near total absence of Ukraine from the export market and the limited trade from Russia due to sanctions following the invasion. The Ukraine Grain Association estimates that nation’s grain exports at 47 million tons, compared to 70 million last marketing year. One exception to India’s ban will be Egypt, with Cairo recently agreeing to buy 500,000 tons. This ban has reportedly left about 2 million tons of wheat stranded at ports in India, likely now bound for the domestic market. The U.S., Canada, Australia, and Europe could all benefit from India’s action, but that will depend on weather and will still probably push prices higher, further impacting some already food insecure parts of the world. For U.S. winter wheat, 48% of the crop has headed, compared to 53% typically this time of year, with 27% rated good to excellent, 2% lower than last week. For U.S. spring wheat, 39% of the crop is planted, compared to the usual pace of 67%, and 16% has emerged, compared to 30% on average. The USDA says wheat export inspections were in-line with what’s needed to meet projections for the marketing year, primarily to Mexico and Taiwan.