Soybeans down on tariff talk, profit taking
Soybeans were lower on profit taking and technical selling, but still managing a higher week to week close. Friday, China bought 264,000 tons of U.S. beans, half for this marketing year, half for next, which starts September 1st. That is as Beijing continues to try and meet purchase obligations under Phase One of the trade agreement with the U.S. However, there was talk from President Trump of new tariffs on China, which also pressured the stock market, along with bearish economic numbers that were out Friday morning. The Buenos Aires Grain Exchange says 68.2% of Argentina’s soybean crop is harvested. The USDA says March’s soybean crush was a record 192 million bushels, up 17 million from February and 13 million from March 2019. Soybean meal and oil followed beans lower. The USDA’s attaché in Russia says Moscow will allow imports of genetically engineered soybeans and soybean meal without state registration between April 20th, 2020 and January 1st, 2021. The move only applies to previously approved GE products whose registration had expired.
Corn was mostly modestly lower, consolidating, ending the week steady to modestly lower. The trade was expecting a mixed week of planting progress, but with a drier pattern in wet parts of the Eastern Corn Belt. Ahead of Monday’s update, estimates range from just over 40% planted to as much as 50%. The trade is also waiting to see when or if rumored demand from China surfaces. Export sales have improved following the decline in price and U.S. prices are currently competitive with South America. Still, concerns about feed demand for livestock and ethanol use continue to be big bearish factors. Ethanol futures were lower. The USDA says corn for fuel alcohol use in March was 412 million bushels, down 5% from February and 7% from March 2019, with DDGS production at 1.66 million tons, a decrease of 9% on the month and 11% on the year. The USDA is expected to lower its’ corn for ethanol use estimate in the next supply and demand update on the 12th because of lower blending demand caused by COVID-19 related stay at home and social distancing restrictions. According to France’s AgriMer, 70% of that nation’s corn crop is planted. The Buenos Aires Grain Exchange says 37% of Argentina’s corn crop is harvested, with the running total at 21 million tons. Dry areas of Brazil are expected to get some rain, helping development of their second crop.
The wheat complex was weak to lower on profit taking and technical selling, with weekly losses in the July contracts ranging from fractional to sharp. Most forecasts had rain in Europe and the Black Sea region against a drier pattern in the southern U.S. Plains, potentially stressing the hard-red winter crop. The drier pattern in the eastern Midwest is expected to be beneficial for soft red winter. Spring wheat planting delays are probable in parts of the northern U.S. Plains. Wheat is also waiting to see if China will buy U.S. wheat to shore up state reserves, with Russia out of the market for now and Ukraine expected to hit their cap soon. APK-Inform lowered their outlook for Ukraine’s crop to 24.5 million tons, citing poor weather. France’s AgriMer says 57% of that nation’s soft wheat crop is in good to excellent condition, down 1% on the week. The USDA says all wheat ground for flour during the first quarter of 2020 was 232 million bushels, a little bit less than the fourth quarter of 2019, but 4% more than the first quarter of that year. The 2019 total was 913 million bushels, 1% less than in 2018.