Soybeans, corn buy back some losses
Soybeans were slightly higher on fund buys and technical buys. Beans saw an oversold bounce, with some help from soybean oil and strong crush margins. Soybean meal declined due to demand-driven product distribution adjustments. US soybean production is slower than average but should pick up steam in many areas over the next few days. There is still talk of switching acreage from corn to soybeans in parts of the region, but no confirmation. Soybean oil shrugged off losses in crude and palm oil, which eased on larger-than-expected shipments in Malaysia. Malaysia’s Ministry of Commodities is reportedly proposing to cut the country’s export tax from 8% to 4% to 6% in a bid to reduce supply and boost trade. Part of the bullish sentiment around the world vegetable oil trade is the Russian invasion of Ukraine, which is affecting the planting and export of sunflower seeds and oil.
Corn was slightly higher on fund buys and technical buys. Corn has also been oversold, watching the weather and expecting much better planting progress this week across most of the region. Planting is quite underperforming due to wet, cool conditions in some areas in late April and early May, and while parts of the Midwest and Plains will see more rain this week, other areas should be dry. Hot, dry weather impacts yield potential for second crop corn in central Brazil. AgRural lowered its forecast for Brazil to 112.3 million tons, down 5 million from the previous estimate. CONAB’s updated outlook for Brazil and new USDA supply, demand and production data will both be released on Thursday. Export demand has picked up pace with increased demand from China due to Ukraine’s absence from the market, while domestic demand for ethanol remains solid. The USDA’s weekly ethanol production and inventory report was released on Wednesday.
The wheat complex was mostly higher. Minneapolis has been on the up with the slow pace of spring planting, with more rain forecast for parts of the northern US plains. Chicago was stable to firm and Kansas City was higher, with uncertainties about conditions for winter wheat development. With a soft red winter, the big problem is excessively wet weather in some areas, while a hard red winter focuses on drought or near-drought across much of the southern US plains. Globally, the trade monitors weather impact in India and Europe, as well as conditions in Argentina, Australia and Canada. These concerns and unknowns coupled with the expectation of a large reduction in acreage in Ukraine due to the Russian invasion leave Wheat looking at a neutral to bullish supply and demand situation.
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