Soybeans, corn down, focused on light rain chances

Market News

Soybeans, corn down, focused on light rain chances

Soybeans were lower on fund and technical selling. Beans followed the lead of a correction in world vegetable oils, including soybean oil, canola, and palm oil. Palm oil fell on slower than expected month-to-date imports, while U.S. bean oil ran into overhead resistance earlier this week and followed through on Wednesday’s losses. There’s been some rain in northern and northwestern growing areas, but not enough to break the drought. That produced part of the pressure for canola, with some of that rain falling in Canada. Old crop export sales were up on the week, but lower than average, with a reduction by unknown destinations, while new crop sales were solid, thanks to unknown destinations, and included 6,000 tons to China. With a month and a half left in the 2020/21 marketing year, sales remain well ahead of 2019/20. Soybean meal was lower, following the rest of the complex, and while bean oil was down, it did close well above the session lows. Argentina’s government is reportedly asking citizens to limit water use because of lower-than-normal levels on the Parana River, a key artery to ports.

Corn was modestly lower on fund and technical selling. Corn was watching the weather, with a slightly better chance for rain in some of the 11-to-15-day forecasts. Until then, some key U.S. growing areas will see continued hot, dry conditions and probable crop stress. Old crop exports were a net reduction after a cancellation by China, who’s demand has slowed down quite a bit recently, and new crop sales failed to break 50,000 tons. 2020/21 sales remain well ahead of 2019/20, with the new marketing year starting September 1st. Ethanol futures were unchanged. The USDA’s attaché for the European Union has 2020/21 corn production at 64.5 million tons, rising to 66.85 million in 2021/22, which starts October 1st. The E.U. is expected to remain a net importer of corn. The USDA’s attaché in South Africa projects 2020/21 corn exports at 3.5 million tons, with production at 16.82 million tons, and while those are expected to fall to 2 million and 15 million tons, respectively, in 2021/22, that will allow the nation to bolster stocks, while remaining a net importer. The trade is also monitoring the harvest pace and yield numbers for Brazil’s hard hit second crop.

The wheat complex was mixed. Minneapolis was mostly firm as the recent rain in the spring wheat region probably won’t help much at this stage. Chicago and Kansas City were down on fund and technical selling, along with expectations the winter wheat harvest pace will pick up steam in the areas where it has been lagging. U.S. wheat exports were up on the week and larger than average, with China and the Philippines leading the way. Globally, Russia’s winter wheat yields have been lower than expected and there are concerns about quality in Europe. Ukraine’s state statistics group says grain stocks on July 1st were 5.4 million tons, down 142,000 on the year. There are concerns about dry conditions in parts of Ukraine. The USDA’s attaché for India sees 2021/22 wheat production at 108 million tons, compared to 107.86 million in 2020/21 thanks to an increase in planted area, with government procurement at 43.32 million tons, compared to 38.75 million last marketing year. The attaché in the E.U. has old crop wheat production at 126.3 million tons, with new crop at 138.4 million, but that is questionable because of those crop quality issues. 2020/21 exports are seen at 31 million tons, rising to 33.4 million in 2021/22.

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