Grains, oilseeds end April on a bullish note

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Grains, oilseeds end April on a bullish note

Soybeans were higher on commercial and technical buying. Export sales were up sharply on the week, with China the biggest buyer, followed by Egypt. There is more talk of new interest from China as Beijing seeks to fill Phase One trade agreement purchase targets. The trade is also watching shipping activity out of and harvest progress in Argentina and Brazil. The International Grains Council sees 2019/20 world soybean production at 338 million tons, down 3 million on the month on lower projections for South America and 24 million below 2018/19. 2020/21 production is pegged at 364 million tons, 2 million less than last month. More near-term planting delays are probable in some key U.S. growing areas, but forecasts for next week are generally drier. Soybean meal was higher on expectations for improved feed demand, while bean oil was supported by the higher move in beans, meal, and crude oil.

Corn was higher on commercial buying, along with the higher move in crude oil. Ethanol blending demand is improving as some states reopen following COVID-19 related stay at home restrictions, but production remains slow, even with an uptick in sanitizer production, and margins are negative. The USDA is expected to lower the corn for ethanol use estimate May 12th. Weekly export sales were good, Mexico was the biggest buyer, but the overall pace is still behind last marketing year, with just about four months left in 2019/20. Sorghum sales were solid, mostly to China, with a bullish week for physical shipments. The International Grains Council projects global corn production in 2019/20 at 1.119 billion tons, compared to 1.129 billion in 2018/19, with 2020/21 production at 1.158 billion tons, up 1 million from March. Ethanol futures were mostly lower.

The wheat complex was higher on short covering and technical buying, in addition to the lower U.S. dollar index. Most forecasts have improved rainfall for dry parts of Australia, the European Union, and the Black Sea region, but there are some domestic condition concerns. The USDA’s condition rating for winter wheat declined last week following freeze damage and dry conditions in parts of the southern U.S. Plains and already wet portions of the soft red winter region could see more rain. The trade is also monitoring spring wheat planting weather in the northern U.S. Plains and Canada. The International Grains Council estimates 2019/20 world wheat production 762 million tons, an increase of 30 million from 2018/19. The global crop for 2020/21 is seen at 764 million tons, a decrease of 4 million on the month. Weekly export numbers were neutral, Taiwan and the Philippines each bought more than 110,000 tons, with just over one month remaining in the 2019/20 marketing year.

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