Profit taking leads to lower weekly corn close
Soybeans were lower on profit taking and technical selling, but still managed to end the week firm to higher. Crop conditions mostly look good, but there are concerns about parts of northern and northwestern growing areas. Some of those areas are dry and others have potential for a freeze or frost early Memorial Day weekend. The trade is also waiting to see what the USDA reports for acreage at the end of June. The near-term supply is tight, even as processing bids continue to move lower, which might be an indication of imports to meet crush needs. Most of that is coming from Brazil, which has taken over the export market right now because of the tight U.S. supplies and general season factors, sending their domestic prices to record levels. Even with those gains, Brazil’s beans remain at a discount to U.S. supplies. The Buenos Aires Grain Exchange says 91.4% of Argentina’s bean crop is harvested, with production seen at 43.5 million tons, up 500,000 from the last guess. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.
Corn was lower on profit taking and technical selling, pulling contracts to modest week-to-week losses. Corn was also watching development weather, including colder temperatures to start the holiday weekend, with losses somewhat limited by the tight near-term supply. The USDA’s next set of supply and demand estimates is out June 10th and the third quarter grain stocks numbers are scheduled for late June. There was more talk about China buying U.S. corn, but nothing has surfaced for a few days. Forecasts have more generally dry weather for Brazil’s second crop. Friday, Safras e Mercado issued a new estimate of 61.5 million tons, compared to the April guess of 70.7 million and the 2020 figure of 73.5 million tons, with total production pegged at 95.2 million tons, a decline of 11% on the year. The Buenos Aires Grain Exchange says 31% of Argentina’s corn crop is harvested. Ethanol futures were steady to firm. Russia’s export tax on corn will rise from June 2nd to 8th as Moscow implements a formula-based system that will be reassessed weekly.
The wheat complex was mixed, with Chicago and Kansas City losing ground on the week while Minneapolis gained. Chicago and Kansas City were down heading into Memorial Day weekend with more rain in the forecast for many U.S. winter wheat growing areas, including the potential for flooding in parts of the Plains, but most of the spring wheat region should stay dry, which supported Minneapolis. The USDA’s crop progress and condition numbers are out Tuesday, June 1st, delayed a day by the holiday. Futures markets will be closed Monday. Aside from dry conditions in parts of Russia, global crop weather generally looks good. SovEcon lowered its outlook by 800,000 tons to 80.9 million, citing lower than expected planted area and dry conditions in some areas. Russia’s export tax will be set at $28.10 per ton from June 2nd to 8th, down from the current $61 per ton. DTN says Saudi Arabia is tendering for 720,000 tons of optional origin wheat. The trade is also monitoring increased feed wheat demand by China.