Market News
Soybeans, corn, wheat up ahead of USDA report
Soybeans were higher on commercial and technical buying. Export and crush demand continue to be the primary supportive factors. Soybean oil was up on the tight global supply of and solid demand for vegetable oils, along with the strength in crude oil, while bean meal extended its lower trend on a comparative lack of demand. Malaysian palm oil was up sharply ahead of the U.S. session, but gains were somewhat limited by concerns about demand from China, also a factor for soybeans. The USDA’s weekly export numbers are out Thursday morning. The USDA is expected to lower old crop ending soybean stocks and could reduce new crop as well, but that will probably wait a couple more months, until this year’s production picture is in better focus. The average guess for 2021/22 ending stocks is 222 million bushels, with 2022/23 at 319 million, while the estimate for this year’s crop is 4.604 billion bushels. Analysts are also anticipating reductions in old crop world ending stocks and the production projections for Argentina and Brazil. Those numbers are out at Noon Eastern/11 Central.
Corn was higher on commercial and technical buying. Corn was also getting ready for the USDA’s supply and demand update, along with CONAB’s new outlook for Brazil. Ahead of the report, the average estimate for U.S. corn production is 14.779 billion bushels, with old crop stocks at 1.404 billion bushels and new crop at 1.305 billion. The trade is also expecting cuts in the South American production numbers and global old crop stocks against larger new crop supplies. Near-term forecasts have more rain in some key U.S. growing areas, generally the north central Corn Belt, further delaying planting activity. Central Brazil continues to experience hot, dry weather, sapping yield potential for their critical second crop. Export demand, especially from China with Ukraine largely out of the market, and ethanol demand are positives for corn. The U.S. Energy Information Administration says ethanol production last week averaged 991,000 barrels a day, up 22,000 on the week and 12,000 tons the year, with stocks at 24.14 million barrels, an increase of 253,000 from the previous week and 4.747 million from a year ago. France’s AgriMer estimates 2021/22 corn ending stocks at 2.2 million tons, compared to 2 million in April.
The wheat complex was sharply higher on commercial and technical buying. Drought is a concern in the southern Plains, negatively impacting hard red winter wheat, while much of the northern Plains is excessively wet, delaying spring wheat planting. Portions of the eastern Midwest are also excessively wet, but soft red winter is in comparatively better condition. Thursday’s USDA supply and demand update is expected to peg U.S. all wheat production at 1.789 billion bushels, including 1.245 billion bushels of winter wheat, with old crop stocks at 681 million bushels and new crop sat 655 million. The trade is monitoring the impact of Russia’s invasion of Ukraine and its impact on winter wheat harvest activity, spring wheat, planting, and export business. That also includes the theft of Ukrainian grain and farm implements by Russia. France’s AgriMer projects 2021/22 soft wheat ending stocks at 3.2 million tons, an increase of 200,000 on the month, while pegging exports outside of the European Union at 9.25 million tons and inside the block at 8 million tons, decreases of 250,000 and 100,000 tons from the last guesses, respectively. There’s video of wheat being destroyed in parts of China for unspecified reason, with Beijing’s ag ministry reportedly investigating the issue. Wheat flour prices in India have surged to record highs due to production problems and increased exports.
