Soybeans surge, expecting tighter ending stocks

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Soybeans surge, expecting tighter ending stocks

Soybeans were sharply higher on commercial and technical buying. The USDA is expected to tighten the domestic ending stocks projection Wednesday on the monthly supply and demand report. This report will also include the first official new crop production, yield, and ending stocks estimates. Ahead of the report, most analysts expect the department to project another year of tight supplies for 2021/22, which gets underway September 1st. The numbers are out at Noon Eastern/11 Central. The near-term supply remains tight and overall demand continues to be solid. There are reports of more soybeans from Brazil on their way to the U.S. as crushers try to keep up with demand. Soybean meal and oil were higher, supported by commercial buying.

Corn was higher on commercial and technical buying, recovering part of Monday’s losses. The USDA will also likely lower corn ending stocks and trim the production outlook for Brazil because of warm, dry weather in central and southern growing areas impacting their second crop. CONAB will also be issuing a new estimate for Brazil Wednesday. Stateside, Planting and development are ahead of average, but there are concerns about conditions in some areas. The USDA says China bought 680,000 tons of new crop U.S. corn Tuesday morning, the third business day in a row with a sale for a running total of 3.06 million tons. U.S. corn prices remain at a deep discount to China’s domestic prices. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are also out Wednesday. France’s ag ministry reports corn planted area was down 10% on the year.

The wheat complex was higher on commercial and technical buying. Dry weather is a continued issue in many spring wheat growing areas, from the U.S. Plains to Canada. The USDA’s winter wheat condition rating was up on the week but remains below a year ago. Wednesday, on average, old crop U.S. ending stocks are expected to be down modestly on the month, while the domestic production guess will likely be increased and the USDA is expected to project record global production. A big question is whether or not the USDA will raise the feed wheat estimate after unexpectedly lowering in in April. The old crop export estimate could be lowered, with the new marketing year for wheat starting June 1st. France’s ag ministry says soft wheat planted area was up about 15% from 2020.
DTN says Indonesia is tendering for 180,000 tons of feed wheat.