Corn, soybeans, wheat rally ahead of USDA reports
Soybeans were modestly higher on short covering and technical buying. No new export sales were announced Monday with continued tensions between the U.S. and China likely a contributing factor to the recent slowdown in trade, even with a sizable U.S. price discount to Brazil. Announced sales have been sparse during the latter half of June, with Washington D.C. and Beijing dealing with a number of issues, including the spread of COVID-19, Hong Kong, Taiwan, and if China will meet purchase obligations under phase one of the trade agreement. Weekly export inspections were bearish with only a nominal amount of beans headed to China as most of the recent purchases have been for 2020/21 delivery, after September 1st. The USDA says 95% of U.S. soybeans have emerged, compared to the five-year average of 91%, and 14% are blooming, compared to 11% on average, 71% of the crop rated good to excellent, up 1% on the week. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Statistics Canada says Canadian farmers planted 5.07 million acres of soybeans, down 11.3% from 2019, and 20.778 million acres of canola, a decrease of 0.8%.
Corn was higher on short covering and technical buying. Contracts bounced off the last week’s new lows, also watching crop development conditions. As of Sunday, 4% of corn is silking, compared to 7% on average, with 73% of the crop called good to excellent, up 1%. The USDA’s planted area totals and quarterly stocks numbers are out Tuesday at Noon Eastern/11 Central. Weekly export inspections were more than what’s needed weekly to meet projections for the current marketing year, mainly to Mexico and Japan. Still, the overall pace of sales remains relatively slow, with additional concerns about feed and fuel use. Ethanol futures were higher. According to Statistics Canada, corn planted area in that nation was 3.559 million acres, 3.7% fewer than in 2019. Tuesday is the first notice day for July grain and oilseed contracts. South Korea reportedly bought 60,000 tons of optional origin corn over the weekend, likely from Brazil. Argentina and Ukraine are also competitors on the export market.
The wheat complex was mostly higher. Chicago and Kansas City bounced off the recent lows, including several new contract lows last week, watching winter wheat harvest activity. Minneapolis was mostly firm, monitoring spring wheat development conditions. For winter wheat, 41% of the crop is harvested, matching the usual pace, and 52% of the crop is called good to excellent, steady with a week ago. For spring wheat, 36% has headed, compared to 45% on average, and 69% of is in good to excellent shape, a week to week drop of 6%. Less than a month into 2020/21, wheat inspections were just above what’s needed to meet USDA expectations for the marketing year. SovEcon says Russia’s wheat harvest is just getting underway. Statistics Canada says all wheat acreage in Canada for 2020 was 24.971 million acres, up 1.5% from 2019, including 17.926 million acres of spring wheat, 4.6% lower, and 5.689 million acres of durum, 16.2% higher. France’s AgriMer says 56% of that nation’s soft wheat crop is in good to excellent condition, steady with the previous week. DTN says Jordan is tendering for 120,000 tons of milling wheat and Algeria is tendering for 50,000 tons of milling wheat, while South Korea is in the market for 50,000 tons of feed wheat.