Big losses for soybeans and wheat
Soybeans were sharply lower on commercial and technical selling. Beans followed the lead of soybean oil and most world vegetable oils, while nothing has really changed for the supply fundamentals. The old crop supply is possibly tighter than what’s being reported by the USDA and the new crop supply likely won’t be that much larger and projections could decline even before 2021/22 gets underway September 1st. That will depend on several factors, including crush and export demand, final planted area, and crop development conditions. Mexico bought 142,500 tons of 2021/22 U.S. soybeans Wednesday morning. Brazil continues to hold a price edge over U.S. beans. The USDA’s weekly export sales numbers are out Thursday at 8:30 AM Eastern/7:30 Central. Soybean meal and oil were sharply lower on commercial selling. Parts of the losses in soybean products, and commodities in general, were tied to the resurgence of COVID-19 in parts of Asia.
Corn was mostly modestly lower, finishing well above the session lows. Corn did see spillover from beans, despite continued weather-related crop stress issues in Brazil and strong new crop demand from China. Wednesday, Beijing bought 1.36 million tons of 2021/22 U.S. corn and has now purchased 9,819,600 tons of new crop over the last 9 business days. The USDA expects China to import 26 million tons of corn during the upcoming 2021/22 marketing year and U.S. corn remains at a steep discount to China’s domestic prices. The trade is also continuing to monitor U.S. planting and development conditions. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 1.032 million barrels a day, the first weekly average topping 1 million tons since March 2020, and up 52,000 on the week and 369,000 on the year. Ethanol stocks of 19.433 million barrels were 40,000 higher than the previous week’s more than four-year low, but 4.193 million lower than a year ago.
The wheat complex was sharply lower on commercial and technical selling. There’s more rain in the forecast for parts of the Plains and Midwest, and the early stages of a major winter wheat crop tour has shown a better-than-expected average yield. The range of yields is very wide and drought damage is reflected in some areas, along with freeze damage from a cold snap during April. World crop conditions are mostly non-threatening, but there is the possibility of stress in parts of Russia and Ukraine. Coceral projects soft wheat production for the European Union at 130.9 million tons, up 4.3 million from the previous guess. The USDA’s next set of production estimates is out June 10th, with the monthly supply and demand report. DTN says Japan is tendering for 121,501 tons of food wheat from the U.S., Australia, and/or Canada.