Soybeans give back some gains as corn finishes firm
Soybeans were lower on profit taking and technical selling, but still finishing the week sharply higher. Old crop U.S. ending stocks were down on the month, pulling new crop stocks lower. USDA did raise old crop production estimates for Argentina and Brazil slightly. Soybean imports by China were unchanged from May. Those adjustments left the overall report neutral to bullish, but beans weren’t able to shrug off that end of the week selling interest. An expected hot, dry period beginning in the coming week should help planting wrap up in parts of the region. The USDA’s planted area and quarterly stocks numbers are out June 30th, with the next round of supply, demand, and production numbers on July 12th. Soybean meal was mostly higher, adjusting old crop/new crop spreads, and bean oil was sharply lower on the drop in palm oil. U.S. margins receded, hitting a three-month low, but remaining in positive territory.
Corn was modestly higher on short covering and technical buying, adding to the week’s gains. U.S. ending stocks were up on the month with a reduction in the old crop export estimate. New crop stocks were higher as that increase in beginning stocks more than cancelled out a slight rise in food, seed, and industrial use. The trade is monitoring development weather ahead of a hotter, drier pattern in many growing areas in the coming week. That should help some areas wrap up planting but might cause some early development damage. Second crop harvest in Brazil is ongoing, with forecasts showing a possible frost/freeze in parts of southern Brazil, potentially trimming yields with about 25% of the crop still vulnerable to weather. In Argentina, 34% of that corn crop is harvested.
The wheat complex was mostly modestly higher, closing out the week with solid gains in the most active months at all three exchanges. Winter wheat production was up modestly on the month due to a slightly higher average yield guess. The USDA raised the soft red and white winter outlooks, while lowering the projection for hard red winter. The 2022 production, yield, and harvested area estimates for wheat are below the 2021 totals. A warmer pattern in the eastern Midwest should help parts of the soft red winter crop dry out ahead of widespread harvest activity. USDA did raise the production projection for Russia, while cutting the European Union and India slightly. France’s AgriMer says 66% of that nation’s soft wheat crop is in good to excellent shape, 1% less than the previous week. The trade continues to monitor talks involving Turkey regarding a Russian exporter corridor for Ukrainian exports. The USDA’s export guess for Ukraine was unchanged.