Soybeans, corn up commercial support

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Soybeans, corn up commercial support

Soybeans were higher on commercial and technical buying, with contracts rallying around midday on the strength in meal. Beans are watching the tail end of U.S. planting, which remains slower than average in some key growing areas, especially the northern Midwest and Plains. The fundamentals are bullish, crush margins are strong, and soybean meal was up solidly, supported by commercial demand. Soybean oil was mixed, nearby months up, deferred contracts down, on bull spreading. Soybean oil continues to monitor crude oil prices and world vegetable oil trade, with Russia’s invasion of Ukraine having a significant impact on both. The USDA’s next set of supply and demand estimates is out Friday at noon eastern/11 Central.

Corn was higher on commercial and technical buying. Nationally, planting is nearly complete and the crop is in slightly better than a year ago condition. Second crop harvest activity is ongoing in Brazil with updated projections from CONAB out Wednesday. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are also out Wednesday. Tuesday, the Renewable Fuels Association reported April ethanol exports at 185.2 million gallons, a four-year high and the third-largest monthly volume ever, jumping 48% from March. The main destinations were Canada, Brazil, and South Korea. DDGS exports of 813,749 tons were a 14-month low, falling 12% on the month, primarily to Mexico, Vietnam, and South Korea. Corn prices in western Ukraine have declined this week on slow demand, high cost of movement, and delayed deliveries. Ukraine is normally a big exporter of corn, with China a leading customer. The U.S. has stepped in to fill some of that gap, but Beijing has recently agreed to import more corn from Brazil.

The wheat complex was lower on profit taking and technical selling. The big question continues to be whether or not Russia will actually open an export corridor for Ukraine. Moscow wants sanctions dialed back as a prerequisite to allow mines to be removed some Black Sea ports, but that’s unlikely because of the ongoing war, recent attacks by Russia on Ukraine’s export infrastructure, and the lack of involvement of Ukraine in discussions between Russia and Turkey. Formal negotiations are still expected to be held Wednesday. A Ukrainian deputy ag minister recently stated Ukraine will only being able to export two million tons of grain a month if the Russian blockade of those Black Sea ports continues. Even if that blockade ends, it would still take months to bring operations fully back online. Stateside, about two million acres of spring wheat remain unplanted and planting remains slower than average in parts of Canada as well. The USDA’s winter wheat condition rating did improve a little bit over the past week as harvest gets underway in some southern growing areas. The USDA will be updating wheat production projections Friday.