Soybeans down, despite demand from China
Soybeans were modestly lower on fund and technical selling. China continues to show more interest in U.S. soybeans, purchasing 198,000 tons of mostly old crop U.S. beans and 20,000 tons of bean oil Thursday morning. Out of that sale, 132,000 tons were for 2019/20 and 66,000 tons were for 2020/21. China was also the biggest buyer of old and new crop U.S. soybeans last week. However, there have been new concerns about trade tensions between the U.S. and China over the past couple of weeks, which were amped up Thursday by comments from President Trump. Beijing reportedly wants to renegotiate the Phase One trade agreement that dictates purchase levels for U.S. ag goods, but Washington D.C. has so far refused. Brazil and Paraguay are reportedly going to release water from a spillway to boost levels on the Parana River, which would help movement to ports for Argentina. Soybean meal was down and bean oil was up on the adjustment of product spreads. The National Oilseed Processors Association’s member crush numbers for April are out Friday. The total is expected to be a record for the month, but down from the all-time high for any month set in March.
Corn was fractionally lower on fund and technical selling. Planting progress is expected to be mixed over the next few days, with rain in some areas and good conditions in others. Still, weekly progress is mostly expected to be good, with early estimates for Monday’s USDA numbers around 80% complete. Old crop export sales were up on the week, mainly to China and Mexico, and China was also the leading buyer for new crop corn. Also, it was a solid week for physical shipments. Ethanol futures were lower. A bill in the U.S. House of Representatives that would help biofuels producers hit by the COVID-19 outbreak is expected to be voted on Friday but will likely not pass the Senate.
The wheat complex was mixed, mostly modestly lower. Most forecasts have more rain in dry parts of the U.S. Plains, Europe, Australia, and the Black Sea region, alleviating some near-term concerns for those areas and generally expected to aid production. Strategie Grains sees the European Union’s 2019/20 soft wheat exports at 34.3 million tons, up 900,000 on the month because of the quotes enacted by Russia and Ukraine, while lowering the 2020 outlook for production to 132.9 million tons, a decrease of 2.1 million on the month and, if realized, 13.6 million below 2019. Early estimates are for a big return to the export market for the Black Sea region exporters in 2020/21. Weekly U.S. export numbers were bearish with the marketing year for wheat wrapping up at the end of the month. Physical shipments were more than what’s needed to meet projections for 2019/20. DTN says Algeria bought 500,000 tons of milling wheat, “likely” from France.