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Soybeans Head Lower Thursday Ahead of Key USDA Reports

Prospective Plantings Report Likely to Show Increased Acres

Soybean futures were lower in early trading Thursday on speculation that the U.S. Department of Agriculture will raise its planting projection in a midday report.

Analysts have pegged soybean seeding from 91 million to 92 million acres, up from last year's record of 90.1 million acres and a February outlook for 90 million. Soybeans have become more attractive in recent weeks as prices on the Chicago Board of Trade have risen on concerns about drought damage to crops in Argentina. 

The USDA also will release its quarterly stocks report at noon in Washington. 

Corn futures, on the other hand, rose in early trading on speculation that producers will give up some acres dedicated to the grain in favor of beans.

Wheat was also lower early Thursday as some much-needed rain fell in the southern Plains in the past 48 hours. 

Soybean futures for May delivery lost 4 1/2¢ to $10.13 1/2 a bushel on the Chicago Board of Trade. Soy meal fell 50¢ to $370.80 a short ton, and soy oil declined 0.07¢ to 31.55¢ a pound.

Corn futures for May delivery rose 1¢ to $3.74 1/2 a bushel in Chicago.

Wheat for May delivery fell 2¢ to $4.43 1/2 a bushel, while Kansas City futures declined 4 1/4¢ to $4.56 3/4 a bushel.

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Wednesday's Grain Market Review

Wheat futures closed lower on Wednesday as rainfall is forecast to continue tonight and tomorrow in parts of the Southern Plains where hard red winter wheat is grown.

"Widespread showers" are expected in parts of southwestern Kansas and the Oklahoma and Texas panhandles tonight, according to the National Weather Service. 

The area has been dry for the better part of the past six months, according to the NWS. The U.S. Drought Monitor shows parts of the Southern Plains in an extreme or exceptional drought, the worst categories on the group’s scale.

Any rain now will boost plants that are emerging after overwintering the past several months.

"There is a slight chance of scattered light rain showers across western and central Oklahoma, along with northwest Texas, through the afternoon, followed by a chance of a few thunderstorms across western Oklahoma and the Texas panhandle this evening," the NWS said in a forecast on Wednesday. 

About 13% of the Kasnas wheat crop was rated good or excellent as of March 25, up from 11% a week earlier. Some 49% was rated poor or very poor, down from 55% a week earlier, according to the USDA. 

Wheat for May delivery fell 3½¢ to $4.45½ a bushel on the Chicago Board of Trade, while Kansas City futures declined 2½¢ to $4.61½ a bushel.

Soybean futures for May delivery lost 1 3/4¢ to $10.17 3/4 a bushel. Soy meal fell $2.20 to $370.20 a short ton, and soy oil added 0.05¢ to 31.63¢ a pound.

Corn futures for May delivery fell 3/4¢ to $3.73 1/4 a bushel in Chicago.

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Tuesday’s Grain Market Review

Wheat futures finished lower on Tuesday, dragging down other markets, amid improved crop conditions in the Southern Plains.

About 13% of the hard red winter wheat crop in Kansas, the biggest U.S. producer of the grain, was rated good or excellent as of March 25, according to the USDA. That’s up from only 11% good or excellent a week earlier, according to the USDA. Some 49% of the crop was rated poor or very poor vs. 55% seven days earlier, the government said.  

Rainfall is expected in much of the eastern Midwest where soft red winter varieties are grown this week as a large storm rolls through the area. That may boost crops that are emerging from overwintering. 

Wheat fell 5¼¢ to $4.48¾ a bushel on the Chicago Board of Trade, while Kansas City futures lost 3¾¢ to $4.64½ a bushel. 

Soybean futures ended lower on the session, while corn was unchanged. Soybean futures have been up and down in recent days amid concern that China will eventually impose tariffs on imports from the oilseed. 

Recent talks, however, allayed those fears. China Premier Li Kegiang reportedly met with a delegation from the U.S. and said a trade war isn't desirable. Treasury Secretary Steven Mnuchin and China’s Economic Leader Vice Premier Liu He were leading negotiations, the Wall Street Journal reported. 

The U.S. has already imposed tariffs against steel and aluminum, and President Trump last week suggested adding duties to Chinese goods valued from $50 billion to $60 billion. China responded by suggesting it would put tariffs on $3 billion worth of U.S. goods, and while soybeans weren’t included, many feared its government would eventually add excises on the oilseeds.

Soybean futures for May delivery fell 5¾¢ to $10.19¾ a bushel in Chicago. Soy meal futures dropped $3.50 to $371.50 a short ton, and soy oil rose 0.12¢ to 31.58¢ a pound. 

Corn for May delivery was unchanged at $3.74 a bushel in Chicago. 

In the outside markets, WTI crude futures lost 1.1%, while Brent crude dropped 0.6%; the dollar rose 0.4%.

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Monday’s Grain Market Review

Soybeans finished Monday’s session lower on concerns that the USDA will bump its forecast for acreage in this week's Prospective Plantings Report. Corn and wheat also declined.

Futures had gained overnight after rains missed key growing areas in Argentina and on allayed concerns when soybeans weren’t on the list of U.S. goods on which China may impose tariffs. Buying lost momentum, however, as the session went on amid worries that U.S. growers will plant more acres with the oilseeds than expected. 

“(One) potential negative for the soybean market is that there are some in the trade indicating that the USDA in their planted acreage report Thursday could come in with the planted acreage for soybeans as high as 91 million to 92 (plus) million acres,” Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines, Iowa, said in a morning note to clients.

“If that should be correct and we stack another good crop on top of a good (maybe record) Brazilian crop and a large U.S. carryover from 2017/2018, producers better be locking in current prices with futures, options, or cash sales because a world supply of beans that is potentially that large is not going to be good for bean prices.”

Soybean futures for May delivery fell 1½¢ to $10.26¾ a bushel on the Chicago Board of Trade. Soy meal futures fell $3.40 to $374.50 a short ton, and soy oil gained 0.05¢ to 31.47¢ a pound. 

Corn futures, meanwhile, declined as export sales last week were reported on the low end of the expected range. 

Sales of the grain to overseas buyers totaled 1.47 million metric tons in the week that ended on May 15, according to the USDA. Analysts had expected sales from 1.4 million to 1.7 million tons. The report on Friday was delayed due to a snowstorm in Washington. 

Corn for May delivery lost 3¢ to $3.74¼ a bushel in Chicago. 

Wheat dropped 6¢ to $4.54¼ a bushel in Chicago, while Kansas City futures lost 10¾¢ to $4.68½ a bushel. 

In the outside markets, WTI and Brent oil futures were each down 0.5%; the dollar also declined 0.5%. 

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