Soybeans up, corn mixed after USDA reports
Soybeans were modestly higher on short covering and technical buying. The USDA is projecting a 10% increase in planted area after the historically slow pace in 2019, but that will depend on the weather. Some key U.S. growing areas are already wet and are expected to see more precipitation ahead of widespread activity. Quarterly stocks were down 17% on the year, slightly larger than expected, and while they did reflect good demand, they also reflected last year’s smaller crop. The Dow Jones Industrial Average was higher at times Tuesday, but closed sharply lower, as equities cemented their worst quarter ever. The trade is also watching movement issues, actual and potential, in Argentina and Brazil as both nations try to contain the spread of COVID-19. China will reportedly resume imports of canola from Canada after a more than one-year ban. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was mixed on spread adjustments, with nearby months down and deferred contracts up. Corn acreage is expected to be up 8% from 2019, above estimates and potentially the largest planted area since the all-time high in 2012. Still, that will depend on not only weather, but also ethanol demand, which has been hit hard by the drop on crude oil prices as the spread of coronavirus limits travel. Crude oil was up Tuesday, but closer to the session’s lows than the higher. The quarterly supply was 8% lower than a year ago. The USDA’s next set of supply and demand estimates is still currently scheduled for April 9th. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Japan bought 113,000 tons of 2019/20 U.S. corn.
The wheat complex was mostly modestly higher, with every month except May Chicago posting some kind of a gain. Planted area for all wheat is expected to be down 1%, which would be the lowest on record for all wheat, that includes a record low for winter wheat in Nebraska. Winter wheat acreage would be the lowest since 1909. The USDA’s weekly state and national crop progress and condition numbers resume Monday, April 6th at 4 Eastern/3 Central. Stocks fell more than expected, declining 11% from last year. According to wire reports, Russia plans to sell a million tons of grain from state stockpiles to the domestic market to help ease supply concerns. Moscow has not yet approved the Ag Ministry’s plan to limit grain exports from April through June.