Soybeans, corn extend rally
Soybeans were higher on commercial and technical buying, with November hitting a new three-month high. Beans followed through on Tuesday’s post-USDA gains, sparked by a lower than expected acreage total. Development weather looks bullish, with rain in parts of the Midwest giving way to a warmer, drier pattern, potentially stressing the developing crop. The questions about demand from China have taken a back seat, for now, to reduced acreage and crop weather concerns. The USDA’s weekly export numbers are out Thursday morning. Grain trade group ANEC projects Brazil’s soybean sales for June at 11.9 million tons as shipping is back to operating mostly normally, despite COVID-19. Soybean meal and oil followed beans higher. The USDA says May’s soybean crush was 180 million bushels, a little bit lower than expected and 3 million less than in April, but 15 million bushels more than May 2019.
Corn was higher on commercial and technical buying, pulling December to a multi-month high. Corn also continued to react to the lower than expected acreage total while watching development weather. An extended hotter, drier period in the Corn Belt could further limit the potential for a record crop this year. Grain group ANEC says Brazil’s corn exports for June are estimated at 774,850 tons. Argentina and Ukraine have also claimed market share at the expense of the U.S. Ethanol stocks were down 870,000 barrels on the week and 2.68 million on the year, a near three and a half year low, and production was up 7,000 on the week at an average of 900,000 barrels a day. Ethanol futures were higher. The USDA says corn for ethanol use during May 2020 was 299.934 million bushels, up 22% from April, but down 35% from May 2019. DDGS production of 1.234 million tons was 22% higher than the previous month, but 37% lower than the year before.
The wheat complex was mostly higher. Chicago and Kansas City were up with near-term rainfall slowing down winter wheat harvest activity in some areas. Parts of the soft red winter region have also reported flooding and yields, test weights, and protein content have all varied widely. The precipitation is welcome in dry spring wheat areas of the northern Plains and Canada, which pressured Minneapolis. According to reports, Ukraine is delaying setting export quotas for the 2020/21 marketing year, which started June 1st, until early to mid-August. Part of that is uncertainty about the impact of dry weather in Ukraine and Russia. 2019/20 wheat exports by Ukraine were a record 20.5 million tons. DTN says Algeria bought 300,000 tons of wheat from an unknown origin, while Japan issued a sell-buy-sell tender for 80,000 tons of feed wheat and two groups from Thailand are in the market for “up to” 236,800 tons of feed wheat. The Food Corporation of India says local wheat purchases are up 13.7% on the year.