Weather woes send wheat higher

Market News

Weather woes send wheat higher

Soybeans were higher on commercial and technical buying. Old crop export sales were up and it was another strong week for new crop sales, and both are ahead of the USDA’s expected respective paces for those marketing year. Unknown destinations and China topped the list for old crop, while the reverse was true for new crop. Crush demand continues to be solid and more near-term planting delays are likely. Soybean oil was down on profit taking, while bean meal was mostly higher on oversold signals, adjusting spreads as traders rolled out of the May contract. Beans are also watching Brazil ahead of new crop planting, with many projecting an increase in acreage to meet global demand. Statistics Canada’s quarterly grain stocks report is out Friday, with the canola supply estimated at 4.581 million tons, compared to 6.572 million a year ago.

Corn was higher on commercial and technical buying. Corn is also watching the U.S. planting pace, along with development weather in central Brazil, with dry weather stressing their critical second crop. In the U.S., near-term planting delays are likely and while most of the Corn Belt should experience warmer temperatures next week, parts of the region will see more precipitation. The Buenos Aires Grain Exchange says Argentina’s harvest is ongoing, with 19% of the crop in good to excellent condition. Old crop export sales were down, but new crop sales were good, and China was the big buyer for both. That’s largely due to Ukraine being almost completely out of the market. There have been no deliveries on the May corn contract.

The wheat complex was sharply higher on commercial and technical buying. The big bullish factor continues to be U.S. and world weather issues. Stateside, large portions of the hard red winter region are in drought or near drought conditions, wide swaths of the soft red winter region are too wet, and planting delays persist is many areas for spring wheat. Globally, a lot of the weather spotlight is on dry weather in India impacting yields, along with, on the non-weather front, the continued issues for Ukraine tied to Russia’s invasion. That includes the theft of crops and implements. That could lead to improved demand for U.S. wheat, but, for now, exports continue to be slower than expected with about a month remaining in the 2021/22 marketing year. Last week’s big buyer for old and new crop U.S. wheat was Mexico. Statistics Canada’s quarterly grain stocks update Friday is expected to show all wheat supplies at 10.442 million tons, compared to 16.231 million a year ago.