Market News
Wheat, corn up as soybeans drift mostly lower
Soybeans were mostly lower on spread trade. Contracts were up early but were pulled lower by spillover from soybean meal, which dropped on profit taking and technical selling. Soybean oil did finish mostly higher, adjusting spreads. The USDA says 50% of this year’s soybean crop has been planted, compared to the five-year average of 55%, with 21% emerged, compared to 26% on average. Most near-term forecasts have more planting delaying rain in some areas and Egypt bought 130,000 tons of old crop U.S. beans ahead of the open. The USDA’s next set of supply, demand, and production numbers is out June 10th. U.S. export inspections were down on the week, up on the year, mainly to Mexico and China. Sustained demand from China continues to be somewhat of a question because of COVID lockdowns and unloading delays at ports.
Corn was modestly higher on commercial and technical buying, along with spillover from the higher move in wheat. Corn was watching the U.S. planting pace, expecting the USDA to report progress at less than 70% complete in the weekly update. As of Sunday, 72% of U.S. corn has been planted, compared to 79% normally in late May, while 39% has emerged, compared to 51% on average. The trade is also monitoring the effects of drought on central Brazil’s second crop, the largest of the three and the source of most of their exports. Additionally, parts of southern Brazil might have received a frost this past weekend. U.S. export inspections were above a week ago, but below a year ago, primarily to China and Mexico.
The wheat complex was sharply higher on commercial and technical buying. Russia says it will not allow grain shipments from Ukraine, further complicating the global supply and demand situation. Russia is blaming sanctions following its invasion of Ukraine for the growing world food problems and asking other grain exporting members of the Eurasian Economic Union, all former Soviet Socialist Republics, to add quotas and duties for countries outside of the bloc. Russia is also reportedly stealing grain and equipment from Ukrainian farmers and the invasion is preventing spring planting and winter crop harvesting in many areas. The market is also watching development conditions for winter wheat in the southern U.S. Plains and Midwest, along with spring wheat planting weather in the northern U.S. Plains and Canada. For U.S. winter wheat, 28% of the crop is in good to excellent shape, up 1% on the week, and 63% has headed, compared to 65% on average. For spring wheat, 49% of the crop is planted, compared to the normal rate of 83%, and 29% has emerged, compared to the five-year average of 50%. U.S. export inspections were in-line with what’s needed to meet USDA projections for the soon-to-end 2021/22 marketing year, with Japan and Mexico leading the list. The USDA’s attaché for the United Kingdom estimates 2021/22 wheat production at 13.988 million tons, compared to the official guess of 14 million and the 2022/23 projection of 14.7 million tons. India is reportedly continuing to relax their wheat export restrictions, but production will still be well below initial projections.