Soybeans down, cementing weekly losses

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Soybeans down, cementing weekly losses

Soybeans were sharply lower on commercial and technical selling, along with spillover from bean oil, ending the week lower. The USDA may have raised old and new crop U.S. ending stocks Thursday, but the supply remains historically tight. There’s still two and a half months left in the 2020/21 marketing year and 2021/22 runs through the end of August 2022. In other words, there’s still a lot up in the air at this point for the supply and demand fundamentals. Most medium-term forecasts have more hot, dry weather and expanding drought conditions in some key U.S. growing areas. The trade is also waiting to see how much of an increase producers made from their planting intentions, with the USDA’s planted area totals out June 30th, along with quarterly grain stocks. IHS Markit has planted are at 89.065 million acres, up more than a half a million from their last guess and nearly 1.5 million above the USDA’s estimate from March. Cash basis levels were higher in some areas Friday and there’s talk that Brazil might be close to exhausting their exportable supply. A lot of those beans have gone to China. Soybean meal was higher on technical buying, while bean oil was pressured by a sharply lower move in global vegetable oils. July bean oil did trade limit down, only barely closing above that mark.

Corn was lower on commercial and technical selling, while ending the week mixed, with gains in the deferred contracts. Corn was also watching crop development weather, with limited near-term rain expected in some of the driest areas. That precipitation will help, but those areas will need a break from the high temperatures and more rain will be needed to help the crop reach its full potential. The trade was generally expecting a lower USDA condition rating Monday afternoon at 4 Eastern/3 Central as drought continues to expand in the Midwest and Plains. IHS Markit estimates 2021 planted area for corn at 96.539 million acres, slightly below what they saw in April, but more than 5 million acres larger than the first USDA projection of the season. Ethanol futures were unchanged. SovEcon estimates 2021 corn production for Russia at 15.6 million tons, compared to the prior guess of 14.4 million and the 2020 total of 13.9 million tons. The trade is continuing to watch second crop development conditions in Brazil. Corn is also watching China’s supply very closely, with Beijing expected to release some corn from state reserves soon.

The wheat complex was lower on commercial and technical selling, ending the week mixed. Winter wheat harvest conditions look good, but there are the concerns about weather in spring wheat areas. The longer-term concerns about the spring wheat region were put on the back burner by rain in parts of the region, sending Minneapolis sharply lower for the week. IHS Markit projects 2021 U.S. spring wheat acreage at 11.51 million acres, less than what the firm was expecting in May and below the USDA’s prospective planting estimate from earlier this year. SovEcon sees 2021 wheat production in Russia at 82.4 million tons, compared to the previous projection of 80.9 million tons and the year ago total of 85.9 million. The global supply fundamentals continue to be bearish, with an ample supply and record expected crop. The USDA’s next set of supply, demand, and production numbers is out July 12th. DTN Says Algeria bought 480,000 tons of milling wheat, while the Philippines picked up 50,000 tons of feed wheat, and Tunisia purchased 50,000 tons of soft wheat, all from unnamed origins.