Soybeans, corn down, watching crop weather
Soybeans were modestly lower on fund and technical selling. Soybean sales to China have picked up but remain behind the pace to meet phase one trade deal obligations. China did buy 132,000 tons of 2020/21 U.S. beans Tuesday, but has largely been absent from the market, at least officially, over the past week. Part of the slowdown is likely related to Chinese soybean buyers requesting certification that shipments are free of coronavirus. The USDA’s weekly export sales numbers are out Thursday morning. Brazil’s export arm Anec estimates June exports at 12.6 million tons, compared to the initial guess of 13 million. Development weather looks mostly non-threatening, but some areas of the eastern Midwest do need rain. The trade generally expects the USDA’s planted area numbers to show an increase in acreage vis a vis the March projections, largely at the expense of corn acreage. Soybean meal was modestly higher and bean oil was lower on the adjustment of product spreads. Oil picked up additional pressure from the drop in crude oil.
Corn was modestly lower on fund and technical selling. Corn is also watching development conditions, including favorably warm temperatures and rain in dry parts of the Eastern Corn Belt over the next couple of weeks. The trade is also getting ready for the USDA’s 2020 planted area totals and quarterly stocks data out on the 30th. Corn will also be watching the USDA’s Quarterly Hogs and Pigs numbers closely; those are out Thursday afternoon. The U.S. Energy Information Administration says the domestic ethanol supply is the tightest its’ been this year at 21.034 million barrels. Average production was 893,000 barrels a day, up 53,000 on the week, but down 179,000 on the year. Ethanol futures were mostly weak. India is authorizing the import of 500,000 tons of corn at a 15% duty instead of the normal 60% to shore up feed reserves. Some of that might go to the U.S., but there’s plenty of competition right now for export market share, with Argentina and Brazil holding price advantages over the U.S.
The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis up. Winter wheat harvest conditions generally look good, with reports of good quality and solid yields in many areas. According to results from a major crop tour in Kansas, parts of that state have seen delays from recent rainfall, but other areas did make good harvest progress. Dry spring wheat growing areas in the northern U.S. Plains are expected to receive more rain in the near future. Japan is tendering for 101,243 tons of food wheat from the U.S., Australia, and Canada, while Ethiopia has an open tender for 400,000 tons of milling wheat. Wheat prices are reportedly moving lower in the European Union and Black Sea region as harvest advances.