Corn leads the way down on weather, demand questions

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Corn leads the way down on weather, demand questions

Soybeans were modestly lower on fund and technical selling. U.S. crop development weather looks mostly non-threatening, even if some areas do need rain, and planting should wrap up very soon. The USDA’s national condition rating did decline on the week, but only modestly. Weekly export numbers were neutral to a little bearish and China wants confirmation U.S. beans and meat are COVID-19 free. The USDA says that’s not an issue. Also potentially slowing demand from China is their domestic crush margins. Still, China was the biggest buyer of old and new crop U.S. beans last week and the U.S. continues to hold a price advantage over Brazil. Soybean meal and oil were lower, following beans.

Corn was lower on fund and technical selling, with a couple of key contracts falling through what had been support. Demand for ethanol use has improved but remains well below a year ago, exports were neutral to bearish, and livestock feed demand is a question mark as well. The USDA’s Quarterly Hogs and Pigs report confirmed a record June 1st inventory, but third and fourth quarter farrowing intentions are both 5% below a year ago, implying slower feed demand. Corn planting has wrapped up, but the question is how many acres were planted. The USDA’s planted area totals and June 1st quarterly stocks numbers are out on the 30th. Ethanol futures were lower. The International Grains Council has 2020/21 world corn production at 1.172 billion tons, up 3 million from the May estimate.

The wheat complex was mixed, with Chicago mostly firm and Kansas City and Minneapolis lower. Winter wheat harvest conditions mostly look good right now, but there is rain expected in some areas this weekend, probably delaying activity. Anecdotal yields, protein, and quality have varied widely depending on location, which isn’t all that unusual. Dry spring wheat growing areas in the northern U.S. Plains are expected to see rain in the next week. Weekly export numbers were just about neutral, while the overall supply outlook remains bearish. The International Grains Council sees the 2020/21 world wheat crop at 768 million tons, 2 million more than a month ago. Ukraine’s Economic Ministry is proposing a limit of 17.2 million tons on wheat exports in the upcoming marketing year because of a smaller than anticipated crop.

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