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Soybeans Close Higher on Brazil Concerns, Shutdown Optimism
Soybean futures ended Friday’s session higher on concerns about hot, dry weather in Brazil and optimism for the government shutdown that’s kept traders in the dark about export sales.
Stress on crops in northeastern Brazil is likely to peak before forecast rains next month, Commodity Weather Group said in a report. Some scattered showers have fallen in parts of central Brazil in the past day, but dry weather is expected in the 11- to 15-day forecast.
In southwestern Argentina, where excessive rain has curbed production, heavy rain fell overnight. Rains are expected in northern soybean- and cotton-growing regions, the forecaster said.
Also on Friday, President Donald Trump said he’s reached a deal with Congressional leaders to end the government shutdown for three weeks while the sides negotiate border security. He had refused to reopen the government unless Congress funded his $5.7 billion border wall, with Democrats refusing any funding for the barrier.
Soybeans for March delivery rose 7½¢ to $9.23½ a bushel on the Chicago Board of Trade. Soy meal gained $1.30 to $313.60 a short ton, and soy oil gained 0.48¢ to 29.99¢ a pound.
Corn futures added 3¼¢ to $3.80¼ a bushel in Chicago.
Wheat futures for March delivery dropped ½¢ to $5.21 a bushel, while Kansas City wheat lost 1¼¢ to $5.10¼ a bushel.
Thursday’s Market Recap
Soybeans closed higher while corn and wheat futures were lower on Thursday as investors weigh persistent hot, dry weather in Brazil against concerns about trade between the U.S. and China.
Some crop areas in the South American country are suffering from ongoing drought and temperatures in the 90s. The hot weather is expected to continue into next week, putting some soybean, corn, cotton, and coffee yields at risk, according to Commodity Weather Group.
Trade talks between the U.S. and China scheduled for Jan. 30-31 likely won’t result in an agreement, Commerce Secretary Wilbur Ross said in an interview with CNBC. Negotiators are still “miles and miles” from a trade deal, which shouldn’t be surprising as the sides have “lots and lots of issues.”
Negotiators met two weeks ago for more than two days to discuss trade in what, at the time, were considered fruitful negotiations. Last week, however, U.S. officials said no headway was made on certain key issues pertaining to intellectual property theft.
Ross said in his comments Thursday that the U.S.’s trade deficit with the Asian nation, which China said jumped to $323.3 billion last year, and the country’s 2025 plan under which it plans to dominate technology industries also are sticking points.
The White House has said a deal needs to be made by March 1 or the Trump administration would raise its tariff rate on $200 billion worth of Chinese goods to 25% from their current level of 10%.
Soybeans for March delivery rose 1¼¢ to $9.16¼ a bushel on the Chicago Board of Trade. Soy meal lost 80¢ to $312.10 a short ton, and soy oil gained 0.15¢ to 29.53¢ a pound.
Corn futures fell 1½¢ to $3.77¼ a bushel in Chicago.
Wheat futures for March delivery dropped 4¾¢ to $5.21¼ a bushel, while Kansas City wheat lost 3½¢ to $5.11½ a bushel.
Wednesday’s Market Recap
Soybeans closed higher on Wednesday amid concerns about hot, dry weather in Brazil and excessive rainfall in Argentina.
Temperatures are expected to be around 90˚F. in parts of northern Brazil, though temperatures are expected to ease a bit before again turning hotter in the next six to 10 days.
Yield losses are expected in a fourth of soy-growing areas, a third of first-crop corn regions, half of sugar, and three fourths of cotton areas, Commodity Weather Group said in a report early this morning.
In Argentina, excessive rainfall is threatening crops. Another 4 inches to 8 inches of precipitation are expected in the next 10 days in northern Buenos Aires, southern Santa Fe, and southern Entre Rios states, CWG said. Some corn and soybean replanting is likely in the wettest areas, the forecaster said.
Soybeans for March delivery rose 6½¢ to $9.15¾ a bushel on the Chicago Board of Trade. Soy meal gained 40¢ to $313.40 a short ton, and soy oil added 0.30¢ to 29.36¢ a pound.
Corn futures fell ¼¢ to $3.78¾ a bushel in Chicago.
Wheat futures for March delivery gained 5¾¢ to $5.27 a bushel, while Kansas City wheat added 5¼¢ to $5.15 a bushel.
Tuesday’s Market Recap
Wheat futures closed higher on Tuesday as traders return from a long weekend amid concerns about Russian exports. Soybeans and corn declined.
Russia may restrict exports in a bid to boost domestic supplies, which would leave buyers seeking supplies, potentially from the U.S. Black Sea wheat loadings have been down since the start of the year.
News agencies in Russia have reported that the country’s government is considering strengthening controls on shipments of the grain to ensure that domestic prices stay low.
The USDA said last month it expects Russian wheat exports to total 36.5 million metric tons in the 2018-2019 marketing year, down from 41.4 million a year earlier. U.S. shipments are pegged at 27.2 million tons vs. 24.5 million the previous marketing year.
Wheat futures for March delivery rose 4¢ to $5.21¾ a bushel on the Chicago Board of Trade. Kansas City wheat added 4½¢ to $5.10½ a bushel.
Soybeans, meanwhile, declined on pessimism about global demand. Chinese economy grew at a 6.6% rate in 2018, the slowest since 1990, the government said. Analysts from Wells Fargo said they see the Asian nation’s expansion slowing further in 2019.
Slowing growth threatens demand for soybeans on a global basis as China is the world’s biggest importer of the oilseeds.
Soybeans for March delivery lost 7¢ to $9.09¾ a bushel. Soy meal was down $1.80 to $313.30 a short ton, and soy oil added 0.05¢ to 29.06¢ a pound.
Corn futures lost 2½¢ to $3.79¼ a bushel in Chicago.