Corn, soybeans, wheat rally
Soybeans were sharply higher on fund and technical buying. Contracts bounced off the recent lows, with support from the tight near-term domestic supply. Planting and development conditions look good in most U.S. growing areas. Old crop export sales were below average, Indonesia and Egypt topped the list, with new crop at the low end of estimates, led by Mexico and unknown destinations. China didn’t buy any U.S. beans last week, at least not outright. The Buenos Aires Grain Exchange says 91% of Argentina’s crop is harvested, a little bit ahead of average. Argentina’s Ag Ministry says 19.4 million tons of 2020/21 beans have been sold, compared to 23.2 million at this stage of 2019/20, with some producers holding back because of the decline in the nation’s currency. The International Grains Council projects 2021/22 world soybean production at 383 million tons, unchanged from April and up from the 2020/21 estimate of 361 million. The USDA’s next set of production numbers is out in the supply and demand report due June 10th. Soybean meal and oil were supported by fund buying and the strength in beans.
Corn was sharply higher on fund and technical buying, including a limit up finish in July. Corn was also looking at a tight near-term supply and generally good U.S. development weather. The trade is also monitoring the impact of rain in parts of Brazil on their critical second crop. Old crop exports were larger than expected, including a sale to China, and new crop sales were very strong for the second week in a row, led by China. Unknown destinations bought 152,400 tons of 2021/22 U.S. corn. The new marketing year for corn starts September 1st. The Buenos Aires Grain Exchange reports 31% of Argentina’s corn crop is harvested, compared to 38% on average. Argentina’s Ag Ministry says 28.2 million tons of the 2020/21 corn crop has been sold, compared to 25 million tons in 2019/20. The International Grains Council pegs 2021/22 world corn production at 1.194 billion tons, compared to 1.192 billion last month and the 2020/21 guess of 1.134 billion tons. Ethanol futures were unchanged. The European Commission lowered expectations for European Union 2020/21 and 2021/22 corn imports by 1 million tons, each, with both at 15 million, with the E.C. increasing their feed wheat guess. DTN says one South Korean feed mill bought 137,000 tons of corn while tendering for another 138,000 tons, and another feed mill purchased 68,000 tons, with all activity optional origin.
The wheat complex was sharply higher on fund and technical buying. More rain is expected in winter wheat growing areas, but it could miss some of the drier parts of the spring wheat growing region in the northern and northwestern Plains into Canada. Some flash flooding is possible in already saturated winter wheat growing areas. Global crop conditions mostly look good, but parts of eastern Russia need rain. Most forecasts do have better rain chances in western Russia and Ukraine. The International Grains Council has 2021/22 world wheat production at 790 million tons, unchanged on the month and up solidly from the anticipated 2020/21 total of 774 million tons. The European Commission projects 2021/22 soft wheat production for the European Union at 126.2 million tons, compared to the last guess of 124.8 million and the 2020/21 total of 117.2 million. Exports next marketing year are seen at 30 million, unchanged on the month, compared to the old crop expectation of 27 million. With less than a month left in the 2020/21 marketing year for wheat, U.S. old crop exports were lower than average, while new crop was good, not great. There’s a chance old crop will fall short of the USDA’s estimate for the soon to end marketing year. DTN says Tunisia is in the market for 92,000 tons of wheat and Japan issued a sell-buy-sell tender for 80,000 tons of feed wheat.