Grains, oilseeds steady to lower for the week
Soybeans were modestly higher on short covering and technical buying, still ending the week lower. China has bought a lot of U.S. beans recently and is expected to speed up purchases to meet obligations under Phase One of the trade agreement with the U.S. While there has been talk Beijing wants to renegotiate the deal, state grain buyer COFCO says it will step up purchases, but President Trump has talked about new tariffs and the U.S. government is signaling a potential crackdown on tech giant Huawei. The trade was watching the weather, expecting rain to slow planting down in parts of the Midwest and Plains. Informa Economics pegs 2020 U.S. planted area at 85.89 million acres, compared to the current USDA estimate of 83.5 million. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The National Oilseed Processors Association says member firms crushed 171.754 million bushels of soybeans in March, up on the year and larger than expected. The Buenos Aires Grain Exchange says 87.4% of Argentina’s soybean crop is harvested.
Corn was mixed, mostly firm on spread adjustments, but ended the week steady to modestly lower in the most active months. Corn was watching the weather and those probable planting delays in some key U.S. growing areas ahead of the weekly USDA numbers. The trade is also monitoring any signals about acreage adjustments ahead of the USDA’s planted area totals at the end of June. The latest acreage guess from Informa Economics is 94.16 million, compared to the current projection of 97 million acres. Export demand for corn has improved, but there are concerns about demand for feed and fuel use. The USDA’s next set of supply and demand estimates is out June 11th. Ethanol futures were higher. The Buenos Aires Grain Exchange says 40% of Argentina’s corn crop is harvested. The trade is also monitoring second crop corn development weather in Brazil.
The wheat complex was mixed, with Chicago and Minneapolis down and Kansas City steady to firm. Wheat was also keeping an eye on crop weather and while recent rainfall has helped in portions of the U.S. Plains, the Black Sea region, and Europe, more will be needed. U.S. winter wheat conditions are mixed and spring wheat planting is slower than normal. The three U.S. wheat pits all ended the week lower, including more than $.20 losses for the July Chicago and Kansas City contracts. According to reports, harvest activity is underway for India’s record crop, but some producers are unable to move the crop because of a lack of staff at grain merchants. DTN says Japan, Jordan, and Tunisia all have open wheat tenders. Russia’s second wheat cargo to Saudi Arabia has been shipped.