Market News
Corn up on export demand from China
Soybeans were mixed, with nearby months down and deferred contracts up. The near-term supply continues to be tight and overall demand remains solid, even if export sales have slowed down. That’s due to seasonal factors, primarily the increased availability of beans from Brazil, along with the tight U.S. supply and high prices. U.S. prices remain below China’s domestic prices, but the chance for any bump in demand is limited because of the supply. There have been more reports of U.S. processors buying beans from Brazil because of their price advantage. 61% of U.S. soybeans are planted, well ahead of the average pace. Soybean meal and oil were mixed on spread adjustments, with July oil unable to sustain an overnight move above $.70.
Corn was modestly higher on fund and technical buying. Corn is also looking at a solid fundamental picture and faster than average planting. Near-term, U.S. conditions, on average, look good, but there is a chance of a La Nina pattern emerging this summer. China bought 1.36 million tons of new crop U.S. corn, the eighth business day in a row with a sale, for a running total of 8,459,600 tons, nearly all of that to China. China’s General Administration of Customs says April corn imports were 1.85 million tons, more than double the previous year, with the 2021 pace at 8.58 million tons, roughly triple the 2020 total at that point. The U.S. continues to have a price advantage over China’s domestic prices and those of many key export competitors. There’s the probability of more stress for Brazil’s critical second crop, with conditions in some areas falling rapidly due to hot, dry conditions. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.
The wheat complex was mixed, mostly modestly lower, not following through on the initial gains. There’s more rain in the forecast for spring wheat growing areas in the U.S. and Canada, while soft red winter is in better shape than hard red winter ahead of a major U.S. winter wheat crop tour. Global crop conditions generally look good and most projections are calling for record world production this and next marketing year. The USDA’s next set of projections is out June 10th. Russia’s formula-based export tax goes into effect in less than a month, which could aid U.S. business as the new marketing year gets underway. DTN says Algeria and Bangladesh are both tendering for 50,000 tons of optional origin milling wheat.
