Soybeans, corn bounce back
Soybeans were modestly higher on short covering and technical buying but closed towards the lower end of the day’s range. Contracts were oversold and followed the lead of the broader market, with the Dow and crude oil buying back part of Monday’s drop. U.S. soybean ending stocks were unchanged on the month and the USDA raised crop outlooks for Argentina and Brazil. The USDA’s new outlook for Brazil is above the new projection from CONAB of 124.2 million tons. Brazil’s harvest is about halfway through and the recent drop in their currency gives them a further competitive advantage against U.S. exports. Argentine farm groups have started a four-day protest of Buenos Aires’ increase in export taxes. The USDA says unknown destinations bought 123,000 tons of 2019/20 U.S. beans, bringing the two-day total to 246,500 tons. That might be China, but it might not be either. The USDA left 2019/20 soybean imports by China unchanged at 88 million tons. New USDA supply and demand estimates are out April 9th. Soybean meal and oil followed beans higher. The USDA lowered the biodiesel use estimate for bean oil but raised exports on the tighter global supply of palm oil.
Corn was modestly higher on short covering and technical buying. Corn was also oversold and followed the broader market, with very few changes to the supply and demand outlook. U.S. ending stocks and South American production were steady on the month, with world stocks up slightly. CONAB now has Brazil’s combined corn crop at more than 100 million tons, now including a third harvest, much smaller than the other two. The USDA has Brazil’s corn crop at a combined 101 million tons. Dry parts of Argentina and Brazil are expected to see at least some rain later this week. The USDA also raised its’ export outlook for Ukraine. In the U.S., planting delays are possible in some areas, with the USDA’s prospective planting numbers out on the 31st, along with quarterly stocks. The USDA says 28% of Texas’ corn crop is planted, compared to the five-year average of 10%. DTN says one South Korean feed mill bought 131,000 tons of corn and another bought 65,000 tons, both optional origin. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The USDA’s corn for ethanol use estimate was unchanged at 5.425 billion bushels, compared to 5.378 billion for 2018/19 and 5.605 billion in 2017/18.
The wheat complex was mixed, with Chicago up modestly, Kansas City mostly firm, and Minneapolis down modestly. There were no changes to the U.S. balance sheet and while global stocks were down, the projection is still large. The global production estimate was up slightly on the month, with slight increases for some key export competitors cancelling out modest decreases for other nations. Stateside, hard red winter conditions are mixed on the week, better in Kansas and Oklahoma, poorer in Texas, while some soft red winter areas remain excessively wet and an early start to spring wheat planting is probable in parts of the northern U.S. Plains. DTN says Tunisia is tendering for 100,000 tons of milling wheat. The USDA’s weekly export sales report is out Thursday morning. Russia’s currency has recently fallen, increasing their competitiveness on the export market.