Soybeans up, corn mostly firm, watching planting weather
Soybeans were modestly higher on short covering and technical buying. There is optimism about demand from China, even with the tensions between Beijing and Washington D.C. There were some rumors about new sales to China ahead of the open, but nothing materialized, and there are continued disputes about the Phase One trade agreement, COVID-19, and Hong Kong between the world’s two largest economies. Some U.S. action on Hong Kong could happen this week, but that’s still uncertain at this point. U.S. planting and emergence are ahead of average and while some near-term delays are likely, long-term forecasts look better for activity. Soybean loading has reportedly been shut down at one berth in Brazil’s key port of Paranagua because of COVID-19. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. That was despite the Philippines, the biggest buyer of U.S. bean meal, picking up 138,000 tons of 2019/20 meal ahead of the open, and a sharply lower move in crude oil. Monday’s purchase of 216,000 tons by unknown destinations was switched over to the Philippines, bringing their two-day total to 354,000 tons.
Corn was steady to modestly higher. The USDA says planting and emergence are faster than normal, with 70% of the crop in good to excellent condition in the season’s first rating. More near-term planting delays are expected, but weather could be drier after that. Tuesday’s planting figure was a little bit less than what the trade was expecting heading into the report and there are questions about just how many acres will actually be planted to corn this year. The USDA’s 2020 planted area totals are out June 30th, along with quarterly stocks data. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. The trade is also watching harvest activity in Argentina, along with second crop corn development in Brazil and potential shipping issues out of Brazil that could benefit U.S. corn exports. Agroconsult has lowered their outlook for Brazil’s second corn crop to 71.7 million tons, 3% less than their previous guess, citing drought in some growing areas.
The wheat complex was mixed, with Kansas City up and Chicago and Minneapolis down. Winter wheat conditions are mixed, mixed over the past week for hard red and declining for soft red, and spring wheat planting is slower than average, even after a solid week to week increase. Prevented planting is likely in some parts of the northern U.S. Plains. Some firms are lowering production outlooks for Russia and Ukraine, which could help U.S. exports, but that will depend on several factors, including the U.S. dollar and weather in the European Union, Australia, and other major exporters. Ukraine’s deputy ag minister has been quoted as saying that nation will continue to export wheat through the end of the marketing year, even though the quota has been met. Ukraine’s government is projecting a smaller winter wheat crop because of weather conditions during planting and development.