Commodity futures adjust ahead of WASDE report

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Commodity futures adjust ahead of WASDE report

Soybeans closed sharply higher Thursday. The soybean market traded softly higher overnight which picked up early in the session. Soybean futures are continuing to gain strength on South American drought conditions, even with rainfall in parts of Brazil. Traders are expecting strong adjustments in USDA’s global supply and demand report coming out tomorrow. Expectations of tightening ending stocks have been bullish for the market. A lack of a downward adjustment or smaller than expected adjustment would likely send soybeans lower Friday. CONAB, Brazil’s equivalent of the USDA, recently lowered its soybean production estimate to 122.4 million metric tons. CONAB’s estimate is below USDA’s. Soybean crush margins continue to be strong adding positive signals to traders. USDA’s Foreign Ag Service noted the sale of 132,000 metric tons of soybean to China Wednesday. The sale of old crop beans is for delivery this marketing year. May Soybeans closed 26 cents higher at $16.45 and 1/2, July soybeans ended the day 23 and 1/2 cents higher at $16.27, May soybean meal closed $1.60 lower at $460.20 after trading softly higher most of the day, and May soybean oil closed 119 points higher at $73.02.

Corn futures traded mostly sideways on the day, closing mixed on spread adjustments. Corn futures are watching for more news on the export front following a large flash sale to open the week. The Russian – Ukrainian conflict in the Black Sea region continues to be supportive for corn futures. Recent peace talks between the countries have been unproductive and tensions remain high. The Black Sea region is responsible for about 30 percent of global ag exports year to year. The market could see notable adjustments if USDA’s report gives strong signals one way or another on Friday. Russian fertilizer exports to South America are set to end the first week of May. StoneX says the lack of product moving from Russia to Brazil could hinder crop production further, which would be supportive to the market. May corn futures closed one and 1/2 cents higher at $7.57 and 3/4, and July corn closed three and 1/4 higher at $7.50 and 1/4.

Wheat futures were lower at the close Thursday. The complex was softly lower most of the day before trading moderately to sharply lower by the close. Winter wheat futures generally continue to be supported by Russian attacks on Ukraine. Even so, light amounts wheat product has been able to enter the global market from Ukraine; Russian product is still off the global market, especially with trade sanctions instituted against the exporter. Dry U.S. weather in key wheat growing states has been generally supportive to prices. May Chicago led the nearby complex lower – losing 18 and 1/4 cents at $10.20, May Kansas City closed 14 and 1/4 lower at $10.70 and 3/4, and May Minneapolis remains at a premium over the other contracts despite losing nine and 1/4 cents Thursday to close at $10.99 and 1/2.