More rain sends soybeans, corn lower

Market News

More rain sends soybeans, corn lower

Soybeans were sharply lower on fund and technical buying, posting week-to-week losses, with nearby months falling further than deferred months. Seven-day forecasts generally had more rain in the Midwest, but with only scattered precipitation in some of the drier areas of the Plains. While contracts are oversold, this is a weather market, and domestic demand has slowed down. It remains to be seen if slowdown might be due to tighter than reported supplies and not processers having the needed beans on hand. Either way, the supplies this and next marketing year are expected to be historically tight. The new marketing year for soybeans gets underway September 1st. There was more talk, but no confirmation, of new sales of U.S. soybeans to China. Soybean meal was up on an oversold bounce, while bean oil fell sharply after the Supreme Court overturned a lower court’s ruling limiting EPA usage of small refinery exemptions. The USDA says Mexico bought 112,200 tons of U.S. soybean meal, with 84,150 tons for 2021/22 delivery, after October 1st, and 28,050 for 2022/23 delivery. The Buenos Aires Grain Exchange says Argentina’s soybean crop is fully harvested, with production at 43.5 million tons.

Corn was sharply lower on fund and technical selling, ending the week sharply lower, with the biggest losses in deferred contracts. Corn is also watching the weather, with precipitation expected to favor the Corn Belt over the Plains. The USDA’s corn condition rating is expected to improve Monday and weather will continue to be watched closely during July, a critical time for most of the U.S. crop. The USDA’s next production estimate is out July 12th, but ahead of that, the USDA has 2021 planted area totals and quarterly grain stocks numbers on June 30th. There was also pressure from the Supreme Court Friday overturning an earlier ruling limiting SREs. There’s been no change to policy, yet. Ethanol futures were unchanged. U.S. corn prices remain well below China’s domestic prices and there’s been more talk about China buying U.S., but nothing has been announced for a while. Most forecasts have more hot, dry weather in parts of Brazil, with Agro Consult lowering their outlook for the critical second corn crop by 900,000 tons to 65.3 million.

The wheat complex was mixed, mostly lower, also finishing the week mixed, with Chicago and Kansas City down and nearby Minneapolis up. Friday, nearby Minneapolis saw more support from forecasts for hot, dry weather in most of the spring wheat growing region. In all likelihood, the USDA will further cut the condition rating for spring wheat Monday, while lowering the planted area estimate for the 2021 U.S. crop Wednesday. Chicago and Kansas City were down despite rain delaying winter wheat harvest activity and leading to quality concerns in some areas. Globally, some of the spring wheat growing areas of Canada and Russia need precipitation, but there’s still the probability of a record large world crop.