Soybeans give back some recent gains
Soybeans were lower on profit taking and technical selling. The USDA’s national crop condition rating was up slightly on the week, it remains well above a year ago, and development is ahead of average. Near-term development conditions look non-threatening as the crop moves towards August, which is a critical month for beans. Ahead of the open, China bought 126,000 tons of U.S. soybeans and unknown destinations picked up 180,000 tons, with both for new crop delivery. Over the past six business days, some combination of China and unknown destinations has purchased 1,955,000 tons of U.S. beans, mostly for delivery in 2020/21. The U.S. continues to hold a price advantage over South American origins. The USDA’s export sales report is out Thursday. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was lower on fund and technical selling. The USDA’s national good to excellent rating was steady and this week’s crop weather looks mostly non-threatening. The recent shift in weather forecasts for this week have eased some of the concerns about yield loss with the crop in key stages of development. As of Sunday, 69% of U.S. corn is rated good to excellent, compared to 57% a year ago. The USDA’s next production estimate is out August 12th. Before the start of the session, unknown destinations bought 207,880 tons of U.S. corn, with 25,400 tons for 2019/20 and 182,480 tons for 2020/21, which starts September 1st. That could turn out to be China when its’ time for delivery as Beijing tries to meet the WTO’s low-tariff quota target and limit domestic price inflation, with Chinese corn prices at a five-year high. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. A miller in South Korea is reportedly tendering for 207,000 tons of optional origin corn. U.S. corn is at a price disadvantage to Argentina and Brazil.
The wheat complex was higher on short covering and technical buying. Contracts were oversold, watching the winter wheat harvest and spring wheat development weather. The trade is also monitoring harvest activity in Europe and the Black Sea region. Russia’s wheat harvest has reportedly slowed down and yields from southern areas remain poorer than expected, supporting domestic prices. The USDA’s attaché in Turkey estimates 2020/21 wheat production at 18 million tons, compared to 17.5 million for 2019/20, the office for Kazakhstan sees that country’s crop at 12.8 million tons this marketing year, compared to 11.452 million last marketing year, and wheat production in Pakistan is expected to be 25.45 million tons, compared to 24.3 million a year ago, but short of expectations. Even with that lower than expected production, the attaché says Islamabad has purchased 6.5 million tons of domestic wheat, compared to 4 million in 2019. The USDA’s next round of global production estimates is out in the supply and demand update due August 12th. DTN says Egypt purchased 115,000 tons of wheat from Ukraine and South Korea bought 60,000 tons of feed wheat, while Taiwan is tendering for 98,230 tons of U.S. milling wheat and the Philippines is the market for 110,000 tons of feed wheat. APK-Inform says Ukraine’s July 1st wheat stocks were just 1.8 million tons.