Drop in wheat pulls corn, soybeans lower
Soybeans were sharply lower on fund and technical selling, in addition to the bearishness in soybean meal, corn, and wheat. The trade was watching U.S. weather, expecting another week of mixed planting progress. The USDA says 66% of soybeans are planted, compared to the five-year average of 67%, with 39% emerged, compared to 43% on average. Contracts are overbought and soybean products dropped on liquidation, but the overall fundamentals remain solid. Crush margins have dipped recently but remain in positive territory. Soybean oil continues to monitor policy impacting palm oil exports in Indonesia and Malaysia, along with imports by China and India. The world’s largest exporter of sunflower oil, Ukraine, is mostly out of the market due to Russia’s invasion. Export inspections were down on the week, up on the year, mainly to Germany and China.
Corn was sharply lower on fund and technical selling, along with the drop in wheat. Corn was also waiting for the USDA’s weekly crop progress and condition numbers. As of Sunday, 86% of corn is planted, compared to 87% on average, while 61% emerged, compared to 68% normally in late May. There was also pressure from the recent import agreement between China and Brazil. That will allow Beijing to import GMO corn from Brazil if that corn meets phytosanitary standards. China has recently stepped-up purchases of U.S. corn with Ukraine largely out of the market following Russia’s invasion. Corn export inspections were nearly 1.4 million tons, but lower than both last week and last year, primarily to China and Japan. The trade is also watching development weather for Brazil’s critical second corn crop, including dry weather in central areas and frost in the south. Harvest is reportedly underway in Mato Grosso.
The wheat complex was sharply lower on speculative and technical selling. There have been more talks between Russia and Turkey about an export corridor for Ukraine, but nothing official was announced during Tuesday’s session. Given that Moscow wants sanctions to be dropped in order for that corridor to be opened, any quick solution, or any solution for that matter, might be unlikely without some serious concessions on the part of Russia. Ukraine’s spring grain planting is nearly complete, with total area expected to be down more than 20% on the year because of the invasion. More spring wheat planting delays are likely in parts of the northern U.S. Plains and Canada. For winter wheat, 29% of the crop is in good to excellent shape, 1% above a week ago, with 72% headed, compared to the usual rate of 76%. For spring wheat, 73% is planted, compared to the five-year average of 92%, with 42% emerged, compared to 69% typically this time of year. U.S. export inspections were above both the prior week and this time last year, with Nigeria and the Philippines topping the list. The 2022/23 marketing year for wheat officially starts June 1st. India is reportedly receiving requests for 1.5 million tons of wheat from several nations, despite talk of restrictions by New Delhi following an unexpected heat wave during key phases of development.