Grains, oilseeds start week on steep losses
Soybean futures closed sharply lower following further COVID related lockdowns in China. The trading partner has shutdown its largest city – Shanghai. The move added sharp downward pressure on fears of lacking export demand. While there were three announced soybean export sales last week, and a pair Monday morning, the market is anxious to see export inspections pick up and actually see product on the move. Monday, the USDA announced the sale of 132,000 metric tons old crop soybeans to China and a mix of old and new crop soybeans totaling 127,000 metric tons to unknown destinations. May soybeans closed 46 cents lower at $16.64 and 1/4, July soybeans finished the day down 41 and 3/4 cents at $16.46 and 3/4. May soybean meal closed $9 lower at $478.90, and soybean oil closed 230 points lower at $72.45.
The nearby corn market traded sharply lower overnight and that carried into most of Monday’s session. Corn, overall, saw general downward pressure with light spread adjustments. Weakening wheat and crude oil futures pushed corn down. COVID lockdowns in China also put downward pressure into the market. Ethanol demand and production has held its ground even with rising prices at the pump. There is still concern that spiking gas prices could keep drivers off the road and lower demand. If demand drops, there would be less gas for ethanol to be blended into. Last week, the U.S. Energy Information Administration said daily ethanol production was up. The production of 1,042 barrels a day was up 16 barrels a day from the prior week and 14 barrels a day over three weeks ago. May corn closed five and 1/2 cents lower at $7.48 and 1/2, and July corn was four and 1/4 cents lower at $7.30 and 1/2.
Wheat futures closed sharply lower on the day – following overnight trading. The complex is keeping up with its trend of sharp day to day swings. Talks of Ukraine’s president offering Russia neutrality to establish peace in the region have traders taking profits while they can. There are some positive drivers in the market to watch: Dry patterns have mostly returned to the U.S. Western Plains. Some support might return to the market if Ukraine is unable to deliver on wheat it owes China. The May Chicago contract led the way down, losing 45 and 1/4 cents to close at $10.57, the May Kansas City contract followed closely behind dropping 40 and 1/4 cents to end at $10.70 and 1/4, and May Minneapolis closed 24 and 3/4 cents lower at $10.79 and 1/2.