Market News
Kansas City wheat up on exports, weather concerns
Soybeans were modestly lower on fund and technical selling. Beans followed the lead of the broader market, while watching conditions in South America and pre-planting weather in the U.S. The trade is waiting to see what kind of start corn planting gets off to and how many acres could be diverted to beans. The USDA’s first planting pace estimate of the season for soybeans is expected to be out on the 20th. Friday, unknown destinations bought 120,000 tons of U.S. beans, half for 2019/20 and half for 2020/21, but sales have slowed and it was a bearish week for export inspections. That sale could be to China, but it could also be to several other nations with Beijing continuing to lean on Brazil for the bulk of its’ soybean needs. Beans are waiting for a substantial bump in soybean demand from China under the Phase One trade agreement. Soybean meal was lower on livestock feed demand concerns, while bean oil following beans and meal. Malaysia says it will lower its’ crude palm oil export duty from 5% this month to 4.5% next month.
Corn was modestly lower on fund and technical selling. Corn also followed the broader market, while continuing to react to last week’s bearish supply and demand numbers. Weekly export inspections were bullish, but the overall pace of sales remains slow and there are concerns about ethanol demand following the drop in crude oil and feed demand as the spread of COVID-19 slows down or stops livestock processing in some areas. The USDA says 3% of the U.S. corn crop is planted, compared to 3% a year ago and the five-year average of 4%. Near-term weather forecasts look mixed for planting. Ethanol futures were higher. OPEC, the U.S., Russia, and other crude oil producing nations have agreed to a record cut in production, just not as much as what some were expecting. The USDA’s attaché in China estimates 2020/21 corn production at 250 million tons, down 4% from 2019/20 on fall armyworm issues.
The wheat complex was mixed, mostly modestly lower. Kansas City was up – unknown destinations bought 120,000 tons of U.S. hard red winter Monday, after China picked up 165,000 tons Friday. Out of Monday’s total, half is for 2019/20 and half is for 2020/21, while Friday’s sale is 55,000 tons for this marketing year and 110,000 tons for next marketing year. The new marketing year for wheat starts June 1st. Weekly export inspections were bearish. The trade is monitoring possible freeze damage for winter wheat, more so hard red than soft red, because of the relative paces in development this year. As of Sunday, 62% of winter wheat is in good to excellent condition, unchanged on the week and up 2% on the year, with 6% of the crop headed, compared to 7% on average. 5% of spring wheat is planted, compared to 9% normally this time of year. Spring wheat planting delays are probable in the northern U.S. Plains and Canada. The trade is also monitoring dry conditions in parts of Russia and Ukraine. France’s AgriMer says 62% of soft wheat is in good to excellent condition, unchanged on the week but well below a year ago. DTN says Turkey bought 250,000 tons of wheat.
