Soybeans up, but unable to hold near day’s highs

Market News

Soybeans up, but unable to hold near day’s highs

Soybeans were higher on commercial and technical buying but finished closer to the lows than the highs with overbought signals and pressure from the broader market. Vegetable oils were higher heading into the session on strong demand and tight global supplies. Old and new crop weekly export sales were within pre-report expectations, with no old crop sales to China and a significant cancellation by unknown destinations. China did buy new crop U.S. beans. The USDA has not announced a new U.S. soybean sale since late January. The trade is also monitoring conditions in Argentina and Brazil. The Buenos Aires Grain Exchange says 14.9% of Argentina’s beans are at the R4 stage, with another 14.6% at R6, so this month’s weather will have a big impact. More harvest delays are probable in parts of Brazil and Argentina could see a net drying effect, with 20% of that crop rated poor to very poor, compared to 15% a week ago. Soybean meal was mixed on old crop/new crop spread adjustments, while bean oil was up sharply on that strength in vegetable oils.

Corn was mixed on commercial spread adjustments, with nearby months down and deferred contracts up. Corn is watching weather in Argentina and Brazil and conditions in the U.S. ahead of widespread planting. The Buenos Aires Grain Exchange says 1.9% of Argentina’s corn crop is harvested, with production estimated at 46 million tons, compared to 51.5 million for the last crop. 16% of the crop is rated poor to very poor, compared to 12% a week ago. Second crop planting delays should persist in parts of Brazil. Stateside, early planting activity is slower than average in the Delta and south. Weekly export sales were a marketing year low just ahead of the halfway point, following a big cancellation by unknown destinations, which canceled out a solid set of sales to China. Shipments were bullish. Sorghum export sales had a net reduction. According to reports, Ukraine’s government sees 2021 corn production topping 34 million tons, compared to 30.3 million last year. Ethanol futures were lower.

The wheat complex was mixed, with Chicago and Kansas City modestly lower and Minneapolis mostly fractionally higher. Any apparent concerns about drought or winterkill were canceled out by slower export demand and the global supply fundamentals. Entering the final quarter of the 2020/21 marketing year, old and new wheat sales were towards the low end of estimates, Mexico and China were the biggest buyers, while old crop shipments were less than what’s needed to meet USDA expectations. The USDA’s next set of supply, demand, and production numbers is out on the 9th. The trade continues to watch conditions ahead of emergence from dormancy in the U.S., European Union, Russia, and Ukraine, weather ahead of spring wheat planting in the U.S. and Canada, and harvest activity in Australia. According to reports, Ukraine’s government expects record 2021 grain production of 29 to 30 million tons of wheat, compared to 25.1 million in 2020. Ukraine’s economic ministry says marketing year to date grain exports are 32.2 million tons, including 13.77 million tons of wheat, with the total down 21.3% from this time last marketing year. Kyiv thinks 2021/22 wheat exports could climb as high as 21 to 22 million tons. DTN says Taiwan bought 100,410 tons of milling wheat from the U.S., while Algeria purchased between 180,000 and 240,000 tons of durum from the U.S. and Canada.