Wheat drops as corn, soybeans lose gains late

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Wheat drops as corn, soybeans lose gains late

Soybeans were modestly lower on profit taking and technical selling, adding to the week’s losses. The fundamentals are bullish, but crush margins have narrowed and there was spillover from crude and soybean oils. July did manage to hold above $17 and the old crop/new crop spreads continue to reflect that bullish supply and demand situation. The trade is monitoring U.S. weather for the very tail end of planting and early development. The USDA’s next round of crop progress and condition numbers is out Tuesday at 4 Eastern/3 Central. The strength in bean meal on aggressive spread trade against bean oil did limit losses. Export demand from China continues to be slower than some were expecting, largely because of high U.S. prices and competition from Brazil.

Corn was modestly lower on profit taking and technical selling, along with spillover from wheat, but was still up for the week. The trade continues to watch weather as the crop in the Corn Belt gets closer to the key pollination phase. Unless there’s significant shifts in planted area, there might not be much of change in the crop size estimate in the USDA’s next round of projections on July 12th. Domestic demand remains solid. Ahead of Friday’s open, unknown destinations bought 105,664 tons of old crop U.S. corn and Costa Rica purchased 144,907 tons of new crop U.S. corn. That sale to unknown might end up going to China, or it might not. That’s been a question mark recently for corn. China has reportedly purchased at least some corn from Russia recently and reached an agreement with Brazil for corn imports. China had previously stepped-up purchases of U.S. corn due to the near total absence of Ukraine from the market following the invasion by Russia. The trade is also monitoring second crop harvest activity in Brazil.

The wheat complex was sharply lower on fund and technical buying, furthering the weekly losses in Chicago and Minneapolis, while ensuring a week-to-week decline for Kansas City. The winter wheat harvest is ongoing with mostly low yields and increased rates of abandonment in parts of the Plains. Spring wheat planting should be over or very close to it in most of the northern U.S. Plains, but the big question is how many acres were actually planted. The USDA’s planted area totals are out June 30th, along with quarterly stocks data. High temperatures are expected to have some impact on the crop in Europe, but there is some rain in some outlooks. Globally, the big unknown for wheat is the impact on the winter grain harvest, spring planting, and export business for Ukraine following the invasion by Russia. Argentina and India are two of the nations that were expected to fill some of that void left by Ukraine, but dry conditions during planting and high temperatures during key development phases, respectively, have thrown that into doubt. Planting in Argentina is 47% complete.