Market News
Soybeans start week higher
Soybeans were higher on short covering and technical buying. No new export sales were announced Monday morning, but China has bought a lot of beans recently. That is in an effort to shore up state reserves in the event of another COVID-19 outbreak and comes despite renewed political and economic tensions between the world’s largest economies. Still, Beijing says it will meet obligations under Phase One of the trade agreement with the U.S. The trade was also watching planting weather ahead of the weekly USDA update. As of Sunday, 53% of U.S. soybeans are planted, compared to the five-year average of 38%, with 18% of the crop emerged, compared to 12% on average. Egypt and China were the biggest destinations for U.S. beans last week, but inspections fell short of the mark to meet USDA estimates for the current marketing year. Safras e Mercado says 30% of Brazil’s 2020/21 soybean crop has already been sold, much faster than average because of the fall in their currency against the dollar. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Oil had additional support from a sharply higher move in crude oil.
Corn was steady to modestly higher in low trade volume. The USDA was expected to report a faster than average planting pace in the weekly numbers, with average projections around 80% complete. The USDA says 80% of corn is planted, compared to 71% on average, with 43% emerged, compared to the usual pace of 38%. More heavy rain is in the forecast for parts of the Corn Belt this week, delaying activity. Additionally, there’s a lot of uncertainty about actual planted area ahead of the end of June acreage totals report. Corn export inspections were more than what’s needed to meet projections for the 2019/20 marketing year, with Mexico and Japan the top destinations. Corn is also monitoring crop conditions in Argentina and Brazil. Ethanol futures were higher.
The wheat complex was lower on fund and technical selling. Recent rainfall in the Midwest and Plains is expected to benefit at least some of the winter wheat crop, but parts of the southern Plains remain dry and portions of the soft red winter growing region have had too much rain. The big bearish issue for winter wheat remains the international side of the ledger, with improved production expectations for some key export competitors and the USDA expecting record global production. Minneapolis was down, even with spring wheat planting much slower than normal and more rain expected in the northern U.S. Plains. For winter wheat, 52% of the crop is rated good to excellent, down 1% on the week and 19% below a year ago, with 56% of the crop headed, compared to 62% on average. For spring wheat, 60% is planted, compared to 80% typically this time of year, and 30% has emerged, compared to the usual pace of 46%. With about two reporting weeks left in the 2019/20 marketing year, wheat export inspections were more than what’s needed to meet USDA expectations, with Japan and the Philippines the leading destinations for the week.
