Market News
Losses continue for corn, soybeans, wheat
Soybeans were lower on fund and technical selling, with nearby contracts unable to hold onto midday gains. Equities gave back some recent gains during the commodity session and the slow pace of export demand for U.S. beans could continue for months. Delayed beans from Brazil are reportedly arriving at crush facilities in southern China, lessening supply concerns. 88% of Brazil’s soybean crop is harvested, slightly ahead of the 85% average. The National Oilseed Processors Association says member firms crushed 181.374 million bushels of soybeans during March, larger than expected and up 7% on the year. Soybean meal was mostly higher, watching for any slowdown of exports for Argentina, and bean oil was lower, following beans and crude oil. Crude oil during the session hit lows not seen since early 2002 following a bigger than expected week to week supply build and the May contract closed below $20 per barrel. The USDA’s weekly export sales numbers are out Thursday morning.
Corn was lower on fund and technical selling, with the most active months establishing new contract lows during the session. For the second week in a row, average daily ethanol production was a record low at 570,000 barrels a day, down 102,000 on the week, and the supply hit an all-time high, gaining 378,000 barrels to 27.469 million. Blending demand continues to drop on reduced fuel demand because of travel restrictions linked to COVID-19. Ethanol futures were unchanged. Near term planting delays are probable in some areas, with overall progress expected to be mixed through the end of the month. 72% of Brazil’s first corn crop is harvested, compared to 71% on average, with 99% of the second crop planted, in-line with the normal pace. Parts of Brazil are dry, but for now, estimates for record production are holding. The USDA’s next set of supply and demand estimates is out May 12th.
The wheat complex was lower on fund and technical selling, but most contracts were able to close above the session lows. Paris milling wheat was lower ahead of the U.S. session and most forecasts have improved weather for the Black Sea region, with both Russia and Ukraine expected to see much needed near term rain. According to wire reports, Ukraine could ban wheat exports if needed, with total sales at 18 million tons out of the 20 million-ton allotment and more than two months left in their current marketing year. Most of that business would likely go to Kazakhstan and Russia. Early estimates for Ukraine’s 2020/21 wheat exports are 12 million to 15 million tons. Romania has reportedly banned wheat exports outside of the European Union. Freeze concerns for the U.S. winter crop are on the back burner until the potential damage can be fully assessed and, in any event, the crop is in better shape than a year ago at this point. Egypt is tendering for an unspecified amount of wheat after buying 120,000 tons earlier this week from Russia.
