Corn, wheat drop, soybeans also lower

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Corn, wheat drop, soybeans also lower

Soybeans were lower on profit taking and technical selling. Beans saw a correction, but the supply remains tight and overall demand is solid, which helped limit losses. The trade is monitoring planting and development conditions in the U.S. Midwest and Plains, in addition to any signs of an increase in planted area. The USDA says 42% of U.S. soybeans are planted, compared to the five-year average of 22%, while 10% has emerged, compared to 4% on average. The USDA says expect inspections were up on the week, down on the year, and remain ahead of the pace needed to meet expectations for the 2020/21 marketing year. The leading destinations were Mexico and Indonesia. Brazil continues to command the lion’s share of the global soybean export market, especially shipments to China. Shipments to China are estimated at 10.6 million tons for May, with 10.3 million expected to come from Brazil and a lesser amount from Argentina. June shipments to China are estimated at 10 million tons. Soybean meal was mostly lower, adjusting spreads, and bean oil was pressured by profit taking.

Corn was sharply lower on profit taking and technical selling, backing off from the multi-year highs established last Friday. Weekend rainfall was better than expected in parts of the U.S. and there’s more in the forecast for this week, but there’s still a long way to go until the crop is made. As of Sunday, 67% of corn is planted, compared to the normal rate of 52%, and 20% has emerged, compared to 19% on average. Brazil generally remains dry, damaging the critical second crop. AgRural estimates production in the most heavily afflicted central-south region at 65.1 million tons, compared to the previous guess of 73 million, with total second crop production at 69.6 million tons, compared to the 2020 final of 75.1 million tons. Brazil’s complete corn crop is now seen at 95.5 million tons, compared to 102.6 million a year ago. Most analysts expect the USDA to lower its estimate Wednesday in the monthly supply and demand report, out at Noon Eastern/11 Central. CONAB’s new production estimate for Brazil is also out Wednesday. China bought 1.02 million tons of new crop U.S. corn Monday morning, but canceled on 280,000 tons of old crop. That brings the two-day total on new crop sales to China to 2.36 million tons. U.S. prices remain at a significant discount to China’s domestic prices. Weekly old crop export inspections were bullish with China and Mexico taking the top slots. Ethanol futures were unchanged.

The wheat complex was sharply lower on profit taking and technical selling. Weekend rain in the hard red winter portions of southern U.S. Plains should help conditions, but spring wheat growing areas from the northern U.S. Plains into Canada will need more. For winter wheat, 49% of the crop is in good to excellent condition, up 1% from a week ago, but down 4% from a year ago, with 38% of the crop emerged, compared to 46% typically in early May. For spring wheat, 70% is planted, compared to 51% on average, while 29% has emerged, compared to the usual pace of 20%. The USDA’s updated wheat production estimate is out Wednesday, along with the monthly supply and demand report. With about a month remaining in the 2020/21 marketing year for wheat, export inspections were up on the week and the year and remain just ahead of the year ago pace. The main destinations were China and South Korea. The new marketing year for wheat gets underway June 1st.