Soybeans hold onto gains as wheat loses ground

Market News

Soybeans hold onto gains as wheat loses ground

Soybeans were higher on commercial and technical buying. Unknown destinations bought 143,000 tons of U.S. beans Thursday morning, 142,500 tons of that new crop, and weekly new crop sales were solid, mainly to Pakistan and China. Chinese soybean imports shot higher in May as some delayed cargoes made their way to port. Beijing’s relaxation of COVID lockdowns is also expected to improve demand. Beans had some additional benefit from a sharply higher move in bean meal, while bean oil was lower on profit taking and the unwinding of product spreads. Beans continue to have an eye on a heat dome expected to cover parts of the Midwest and Plains starting late this weekend, early next week, and the potential impact on development. In Argentina, soybean yields are reportedly better than expected in some areas. Egypt canceled an import tender for soybean oil, opting to purchase locally produced bean oil.

Corn closed mixed, mostly weak, with deferred contracts wilting late in the session. Corn adjusted spreads while watching development weather ahead of an expected hot, dry pattern hitting much of the region next week. That should allow some producers to finish planting, but also might cause some damage during early development. The USDA’s next set of supply, demand, and production numbers is out Friday. Any damage from heat or the recent storms in the Midwest wouldn’t be factored in until at least July’s update. The supply and demand outlook is bullish, even if the weekly export numbers were unimpressive. In the final quarter of the current marketing year, old crop sales failed to break 300,000 tons, while new crop sales were just 73,500 tons. Still, shipments were above what’s needed to meet USDA projections. China did not buy any U.S. corn last week.

The wheat complex was lower on profit taking and technical selling. Just over a week into the 2022/23 marketing year, export sales are off to a slow start, with plenty of competition and high freight rates impacting demand. There’s been no real progress in talks regarding Russia opening an export corridor for Ukraine. There have been agreements between Russia and Turkey, but Ukraine has had little to no actual involvement in the negotiations. Moscow is calling for the removal of sanctions and for Ukraine to demine the Black Sea in exchange for that corridor, but Moscow has also continued its offensive in parts of Ukraine, including on some key ports. What little grain Ukraine is exporting now is moving by rail and truck. Additionally, Ukraine is claiming that Russia is selling stolen grain to Turkey. Pakistan says it will import 3 million tons of wheat this year from several nations, including Russia. Strategie Grains has reduced their European Union soft wheat export estimate to 28 million tons, citing slower demand. The USDA’s attaché in India has lowered their wheat production outlook to 99 million tons, down 11 million from the initial estimate due to sweltering heat during key development periods, while cutting exports and ending stocks to 6 million and 8.5 million tons, respectively. Wheat planting is effectively wrapped up in Australia, with generally good near-term weather in most forecasts. The Rosario Grain Exchange has cut their 2022/23 production estimate for Argentina to 18.5 million tons due to smaller planted area caused by dry conditions.

.