Fundamentals support soybeans

Market News

Fundamentals support soybeans

Soybeans were higher on commercial and technical buying, with double digit gains in the May, July, August, and September contracts. Beans are keeping an eye on soybean product prices, world vegetable oil demand, and the energy markets. The overall supply and demand outlook continues to be the big driver. Ukraine and Russia aren’t significant players in the global soybean market, but Ukraine is the leading exporter of sunflower oil and both have large roles in world energy. Sustained demand from China is a question mark with many projections showing a big increase in their domestic planted area. That doesn’t include demand concerns linked to more reports of COVID-19 infections in China. China’s General Administration of Customs says U.S. soybean imports for March were 3.37 million tons, almost half of the year ago total, with year-to-date purchases of U.S. beans 30% behind the 2021 pace. Soybean meal and oil were supported by commercial buying and strong domestic crush demand, with July bean oil notching a fresh contract high.

Corn ended an up and down day firm to higher on commercial and technical buying. There is some rain in the forecast for parts of Brazil, but it’s expected to miss very dry areas in their central growing region. Any rain in Argentina is likely too late to boost crop prospects too much. More near-term planting delays are likely in parts of the U.S. Corn Belt ahead of a warmer, drier pattern in much of the Midwest. Demand has pushed U.S. cash grain bids higher, now over $8 in many areas and, according to DTN, approaching $9 in parts of Texas. China’s General Administration of Customs says corn imports from Ukraine during March were 1.36 million tons, up 64% on the month, with most of that being shipped prior to Russia’s invasion. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 947,000 barrels a day, down 48,000 on the week, but up 7,000 on the year, with stocks falling 371,000 barrels to a 13-week low of 24.342 million barrels, but that was 3.985 million barrels above a year ago.

The wheat complex was mixed. Portions of the southern U.S. Plains are seeing rain, pushing Kansas City lower, but large parts of the region remain locked in drought, helping that pit close towards the middle of the day’s range. Conversely, some soft red winter growing areas are excessively wet. The trade is also watching spring wheat planting conditions, with further delays expected in some areas from cold, wet weather. U.S. wheat continues to be priced above some other export competitors, accounting for part of the losses. The USDA’s next set of supply and demand estimates is out May 12th. The full impact of Russia’s invasion of Ukraine on the global wheat market continues to be an unknown factor. India is picking up some of the Black Sea region export slack, with year-to-date sales at 7.85 million tons, compared to 2.1 million this time last year.