Soybeans extend gains on recent export demand
Soybeans were higher on fund and technical buying. Unknown destinations bought 186,000 tons of U.S. beans, with 66,000 tons for 2019/20 and 120,000 tons for 2020/21. China has denied recent reports of suspending purchases of U.S. ag goods and is also still buying beans from Brazil when possible as a hedge because of political tensions. DTN says China might have purchased as many as 15.5 million tons of beans from Brazil in May, even as Brazilian supplies tighten. The USDA’s weekly numbers are out Thursday morning. Beans are also watching U.S. planting and development weather with a warmer pattern and only scattered precipitation expected over the next couple of weeks. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Syria is reportedly tendering for 50,000 tons of bean meal. Data from the European Union says soybean imports from July 1st, 2019 to May 31st, 2020 are 13.83 million tons, slightly lower than the same period in 2018/19.
Corn was narrowly mixed. Most weather forecasts for late planting and development look non-threatening to favorable in much of the Corn Belt, but dry conditions in some areas will need to be watched. Ethanol production was up 41,000 barrels on the week at an average of 765,000 barrels a day, still down 279,000 on the year, with stocks at 22.476 million barrels, a decrease of 700,000 from the week before and 77,000 tons from this time last year. Ethanol futures were steady to lower. Syria is reportedly tendering for 50,000 tons of corn. That probably won’t go to the U.S. as Argentina and Ukraine both continue to offer competition for export market share. Ukrainian firm ProAgro projects that nation’s 2020 corn crop at 37.58 million tons, compared to their previous guess of 37.3 million. The trade continues to monitor second crop planting and development conditions in Brazil, along with potential impacts on the export pace from COVID-19.
The wheat complex was higher on short covering and technical buying. Contracts were oversold, watching the mostly warm, dry near-term weather for winter wheat harvest activity. That’s going to speed up maturity for hard red winter, likely cause some yield loss, but should help some of the soft red winter crop dry out. Conditions also mostly look favorable for spring wheat planting in the northern U.S. Plains and Canada. Most forecasts have rain in dry parts of the European Union. Ukrainian firm ProAgro sees 2020 grain production at 74.43 million tons, including 26.65 million tons of wheat. DTN says Egypt bought 120,000 tons of wheat from Ukraine. Russia was not competitive in the tender with prices at record highs because of tight supplies.