Correction hits corn, soybeans, wheat hard
Soybeans were sharply lower on profit taking and technical selling, with most months registering losses of about $.30 to $.60. Contracts corrected, despite a neutral to bullish supply and demand report Wednesday. The USDA left the old crop balance sheet unchanged, but there’s some sentiment the USDA is underreporting ending stocks, and new crop ending stocks are only expected to be a little bit larger, and that doesn’t wrap up until the end of August 2022. In other words, there are a lot of unknowns about both this marketing year and next marketing year. The near-term supply remains tight and overall demand continues to be strong, even if exports have slowed down. Weekly old crop sales were routine, but the pace remains on track to meet USDA projections for the current marketing year. China was not a buyer of either old or new crop U.S. beans, with Brazil currently holding most of the export market. The biggest buyer for 2020/21 was Indonesia and Mexico topped the 2021/22 list. The trade is also watching U.S. planting and development weather. Soybean meal dropped, following beans, and bean oil was lower, but with losses limited by global vegetable oil demand.
Corn was sharply lower on profit taking and technical selling, including a limit down move in July and near limit down move in September. The USDA numbers were bearish corn, but the new marketing is still months away, starting September 1st, and those projections will change, and any bearishness is relative because of the actual supply and demand situation. For example, the 2020/21 marketing year started with an ending stocks guess of around 3 billion bushels. There’s a long way to go until new crop corn is made, let alone harvested. China bought 680,000 tons of new crop U.S. corn Thursday morning. That is the fifth business day in a row with a new sale of U.S. corn, mostly new crop, mostly to China. Old crop U.S. corn sales were a net reduction following cancellations by China and unknown destinations, but new crop topped 2 million tons, with China, unknown, and Mexico leading the way. Ethanol futures unchanged. The USDA’s attaché in Russia sees 2021/22 corn production at 14.3 million tons, compared to 13.5 million for 2020/21, with exports this marketing year at 2.9 million tons, rising to 3 million next marketing year.
The wheat complex was sharply lower on profit taking and technical selling, losing about $.25 to just over $.30. U.S. ending stocks topped estimates and the USDA raised crop guesses for some export competitors, with record world production. Rain is in the forecast for parts of the Plains but will likely miss some of the drier areas, especially spring wheat growing areas in the northern and northwestern U.S. Plains and Canada. The USDA’s weekly crop progress and condition numbers are out this coming Monday, while the next production projection is out June 10th, along with the regular supply and demand report. With less than a month left in the 2020/21 marketing year for wheat, old crop sales were bearish and new crop was routine. South Korea was the big buyer on old crop and Mexico led the way for new crop. The USDA attaché in Russia estimates 2021/22 wheat production at 77.5 million tons, compared to 85.3 million for 2020/21, with exports of 40 million tons for both this marketing year and next marketing year. The office does note there’s some degree of uncertainty because of Moscow’s export duty. DTN says Japan is tendering for 122,180 tons of food wheat from the U.S., Australia, and/or Canada.