Market News
Grain futures make modest adjustments digesting USDA reports
Soybeans are traded lower on profit taking. Covid related lockdowns continue in China with Shanghai, its largest city, still closed. Despite the lockdown, USDA announced this morning that China purchased another 145,000 tons of old crop U.S. soybeans. South American crops have been diminishing which the market is expecting to be reflected in USDA’s global supply and demand report Friday; an extreme or minor drop in South American crop expectations would likely be a solid market mover. The week’s forecast expects dry conditions to continue in Argentina and moderate rainfall in northern Brazil. May soybeans closed 11 and 1/2 cents lower at $16.19 and 1/2, July beans were down 10 and 1/2 cents on the day – closing at $16.03 and 1/2, May soybean meal closed $4.10 lower at $461.80, and soybean oil closed 58 points lower at $71.83.
Corn futures are mixed on spread adjustments. Scattered rains in Brazil could benefit the competitor’s safrinha corn crop, adding downward pressure into the market. Traders will also be watching for demand adjustments in Friday’s WASDE report. Ethanol production remains at moderate levels, even after lower production on the week. The U.S. Energy Information Administration says production averaged just over 1 million barrels a day; three percent higher than last year. Ethanol demand uncertainty remains with elevated gas prices. The market would likely see sharp adjustments with any concrete steps toward peace or impactful Russian aggression. Corn is gaining support with speculated corn sales to China coming to fruition. USDA announced the sale of more than 1 million metric tons of corn to China Monday. Nearly 700,000 metric tons of the sale are for delivery this marketing year and about 400,000 for next marketing year. USDA’s recent Prospective Planting report was mostly supportive to corn futures and could continue to add strength as planting season gets underway. Corn planting is on pace with last year and the five-year average with two percent of the crop planted. Texas’ crop is past halfway planted, Kansas is at two percent and Missouri is at one percent. May corn closed three and 1/4 cents lower at $7.56 and 1/2, and July corn closed at $7.47 – down one and 1/4 cents.
Wheat futures are softly higher on the day. Continued drought conditions in key U.S. growing states reflected poor wheat ratings from USDA earlier this week. The complex is holding its elevated prices watching ongoing Russian attacks of Ukraine. Ukrainian President Volodymyr Zelensky addressed the U.N. this morning requesting action from the group signaling the conflict could be far from over. President Biden is calling for further ‘economic isolation’ of Russia. May Chicago led the way down – losing seven cents, May Kansas closed two and 1/4 higher at $10.85, and May Minneapolis closed three cents lower at $11.08 and 3/4.
