Wheat able to rebound a little, corn, soybeans mixed
Soybeans were mixed on spread adjustments, with nearby contracts down and deferred months up modestly. The USDA 8% of the U.S. soybean crop is planted, ahead of average, with good progress reported in several states over the past week. Progress is expected to be mixed this week, better in some areas than in others. According to Allendale, 94% of Brazil’s soybean harvest is complete, compared to 92% both last week and on average. The trade is also watching weather in Argentina, with the possibility of some relief from low water levels on the Parana River, which have slowed movement. South American currencies have hit new lows against the dollar, but there is more talk of China buying U.S. beans. Soybean meal was lower and bean oil was higher on product spread adjustments.
Corn was mixed on spread adjustments, favoring deferred contracts over the nearby months. As of Sunday, 27% of the corn crop is planted, compared to 7% a week ago, with the best progress in northern, central, and western areas of the Corn Belt. Most forecasts have more near-term planting delaying rain in the Eastern Corn Belt during parts of this week. The trade is also waiting to see what the effects of President Trump’s decision to use the Defense Production Act to reopen meat processors has on feed demand. A number of livestock processing operations have slowed down or temporarily ceased production because of COVID-19. The recent drop in price has led the European Union to re-institute a tariff on U.S. corn and sorghum imports, absent since March 2018. Ukraine’s government says it will not limit corn exports. Allendale reports 81% of Brazil’s first corn crop is harvested, compared to 76% a year ago and 82% on average. Ethanol futures were mixed. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday, with the potential for the fourth consecutive week of record low production and record high supplies.
The wheat complex was modestly higher on short covering and technical buying, retaking some of the recent losses. 54% of the winter wheat crop is rated good to excellent, down 3% on the week and 10% below a year ago, while 14% of spring wheat is planted, slower than normal. There is more talk of acreage switching by producers away from corn to spring wheat in the northern U.S. Plains. Dry weather continues to be an issue in parts of Europe and the Black Sea region. The trade is waiting to see if Russia will follow through on their move to suspend wheat exports until the start of the next marketing year on July 1st. The global supply outlook remains bearish with the next set of supply, demand, and production numbers out May 12th.