Wheat buys back part of losses

Market News

Wheat buys back part of losses

Soybeans were mixed, adjusting spreads, but still closing higher for the week. Beans monitored soybean products, in addition to conditions in South America, with drier weather expected in some areas. That’s coming at a critical time in development for soybeans, especially late planted beans in Argentina, which are in the pod filling stage. The USDA’s next set of supply and demand estimates is out April 8th, with CONAB’s updated outlook for Brazil due the day before. China bought 264,000 tons of new crop U.S. beans. The recent increase in sales can be tied to not only the reduced production estimates for South America, but also the concerns over global vegetable oil availability. Both Russia and Ukraine are major exporters of sunflower oil and Indonesia has recently taken steps to further curb palm oil exports. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Part of that support in oil is from talk of new export demand due to the tight global supply.

Corn was mostly modestly higher on spread trade and spillover from wheat, finishing the week modestly to sharply higher. Corn is watching conditions in South America, with drier weather and potential stress in both Argentina and Brazil. That will be watched very closely, especially for the impact on Brazil’s critical second crop. The trade is also monitoring the ability of Ukrainian producers to plant and U.S. conditions ahead of widespread planting. The USDA’s prospective planting report is out March 31st, along with quarterly grain stocks. Unknown bought 128,900 tons of old crop U.S. corn. Traders will be watching the delivery of that corn and other recent purchases by unknown very closely. China has been nearly totally absent this marketing year, but there’s a substantial amount of corn at Ukrainian ports purchased by China waiting for delivery, with no timetable for the resumption of shipments. Ethanol futures were unchanged.

The wheat complex was supported by commercial and technical buying but ended the week with steep net losses after the recent liquidation. The big factor continues to be the volatility and the wide range of uncertainties connected to Russia’s invasion of Ukraine. Russia has been able to resume some shipping to those nations still willing or able to trade with Moscow, but Ukrainian ports generally remain under siege or preparing for siege. When, or if, Ukraine is able to harvest winter wheat and plant spring wheat is an unknown, which would have a global impact on grain supplies. There’s talk of some diversification to shorter season crops this spring to meet those Ukrainian domestic needs. Some millers in Kazakhstan are asking that government to ban wheat exports to ensure domestic supplies. The trade is also watching the drought impact in much of the U.S. Plains. There’s been some recent precipitation, but not enough, and parts of the southern U.S. Plains could see damage from below freezing temperatures. Winter wheat development weather in the eastern Midwest is generally better, but some areas do have excessive soil moisture. France’s AgriMer says 92% of that nation’s soft wheat crop is in good to excellent condition, down 1% on the week, but 4% above a year ago.

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