Market News
Weather concerns propel corn, soybeans, wheat
Soybeans were solidly higher on fund and technical buying but ending the session closer to the day’s lows than the highs. Most forecasts have hotter, drier conditions in many key U.S. growing areas extending into mid-month. That will likely cause at least some stress to developing crops and puts the early production projections in some jeopardy. There were also reports of frost damage over the weekend in parts of the Midwest. The USDA expects historically tight supplies this and next marketing year, which starts September 1st. The USDA says 84% of U.S. soybeans are planted, compared to 75% a week ago and the five-year average of 67%, with 62% emerged, compared to 41% last week and 42% on average. Soybean meal and oil were supported by demand and the fundamental implications of a smaller than expected U.S. crop. The USDA says April’s soybean crush was 170 million bushels, down 18 million on the month and 13 million bushels on the year. Weekly export inspections were down on the month and the year, with Mexico and Japan leading the list of recipients.
Corn was sharply higher on fund and technical buying, finishing in the upper end of the day’s range. Corn is also watching the weather, which could have an impact on yield, while large parts of Brazil’s second crop areas remain dry. Stateside, for both beans and corn, trend line or better yields are being counted on to bolster domestic supply and limit price inflation. The next production guess is out June 10th, with 2021 planted area totals and quarterly grain stocks due at the end of the month. As of Sunday, 76% of the U.S. corn crop is rated good to excellent, 2% better than this time last year, with 95% of the crop planted, compared to 87% on average, and 81% emerged, compared to the usual rate of 70%. In Brazil, AgRural lowered its production outlook by 4.6 million tons to 90.9 million. The trade is also waiting to see what kind of impact the cyberattack on JBS has on demand. Ethanol futures were higher. The USDA says 410.017 million bushels of corn were used for ethanol production during April 2021, down 2% from March 2021, but up 67% from April 2020, during the early stages of the pandemic. DDGS production was 1,786,152 tons, 1% less than the month before, but 76% more than the previous year. Weekly export inspections topped 2 million tons, with China and Mexico the top destinations. France’s Ag Ministry says 91% of that nation’s crop is in good to excellent shape, down 2% on the week.
The wheat complex was sharply higher on fund and technical buying. Minneapolis was in the lead with most of the dry weather for wheat expected to be in the northern and northwestern U.S. Plains into Canada. There have been reports of producers terminating crops because of the already dry conditions in the spring wheat region. Excessive rainfall could be a problem in parts of the central and southern Plains. For winter wheat, 48% of the crop is called good to excellent, up 1% on the week, but down 3% on the year, with 79% of the crop headed, compared to 78% on average. For spring wheat, 43% of the crop is in good to excellent shape, 2% less than last week and 37% below this time last year, with 97% of the crop planted, compared to 93% normally in early June, and 80% emerged, compared to the five-year average of 73%. The trade is also monitoring feed wheat demand. Aside from dry conditions in parts of Russia, global crop conditions generally look good. Russia’s new export tax scheme goes into effect Wednesday. The USDA says wheat export inspections for the week ending May 27th were down on the month and the year, with Mexico and South Korea the two largest destinations. With just a few reporting days left in the marketing year, 2020/21 inspections were slightly ahead of the 2019/20 pace. The 2021/22 marketing year for soybeans started June 1st.
