- ADM, unveiling profits rise, hails improvement in soybean crushing margins
Archer Daniels Midland highlighted the improvement in market conditions for soybean processors as the agricultural trading giant revealed bigger-than-expected earnings growth, despite a fall of its ethanol business into the red. The group, which is with Bunge, Cargull and Louis Dreyfus one of the ABCD group of sector giants, said that it set soybean crush volumes in both North and South America in the January-to-March quarter in a drive to exploit improved profitability in the sector. “Global market dynamics continued to push soybean crush margins higher,” ADM said, revealing that its oilseed processing volumes overall rose by 228,000 tonnes to 9.05m tonnes for the period. The comments come at a time of continued strength in soybean crush margins, which in Chicago touched $1.84 ¼ per bushel of the oilseed in February, the highest on a spot basis since late 2014. The dynamic has been fuelled by the drought-hit soybean harvest in Argentina, the world’s top soymeal and soyoil exporter, where crushers are turning to imports to bolster supplies of the oilseed, besides decent prices to entice producers to sell some of their substantial inventories. In fact, “farmer selling accelerated” in South America, where Brazilian prices are receiving a boost from soaring demand from Chinese importers, which are turning away from US supplies amid Beijing-Washington trade tensions.
- Wheat Futures Jump on Reports of Slow Kansas Growth
Wheat futures jumped Tuesday on reports that adverse weather has stunted the U.S. hard-red winter wheat crop. The annual Kansas Wheat Tour kicked off this morning from Manhattan, Kansas, and some of the 94 participants assessing wheat fields found that cool, dry weather since emergence has slowed plant growth. Others are concerned they’ll find even worse fields in the next two days as the event continues. Dave Green of the Wheat Quality Council, the group that puts on the tour, told agriculture.com he doesn’t believe plants in the northwestern part of the state are facing a dire situation just yet. Conditions haven’t been ideal, but there’s still time for plants to improve if they see some precipitation…
Strength from the Wheat market continues to spillover onto Corn and Soybean joined the party as well today. There have been forecasts calling for an extended period of dryness in the southern region of Brazil and that made for some strength in the US Corn market. Corn futures were up 3.25 to 4.25 cents at the close. The Soybean market traded higher on leaning on strength from the Soymeal complex that reached new contract highs on the day. Shortfalls in the Argentine soybean crop were largely to blame for the Soymeal run. Harvest delays are potentially on the horizon with heavy rains expected to fall on Argentine planted area. The gains in Beans ranged from 2.75 to 3.50 cents. Wheat was on fire to. It gapped open slightly higher that the close from yesterday, filled the gapped and never looked back. Our time cycles calling for Wheat to rally coincided with a perfect series of events. There is a lack of moisture in the Southern Plains, concerns of dryness in Russia and Australia, and flooding in Argentina’s Wheat area. Wheat was up a massive 17 to 18.25 cents.