Big drops for corn, soybean, and wheat futures

Market News

Big drops for corn, soybean, and wheat futures

Soybeans were sharply lower on fund and technical selling. Beans followed soybean products, with meal down on the drop in China’s domestic prices and bean oil seeing spillover from crude oil. That drop in China’s domestic meal prices was linked to rising domestic supplies, while that decline in soybean oil is not only tied to crude oil, but also the recent losses in global vegetable oils. There are also uncertainties about overall demand from China due to concerns about COVID lockdowns. Brazilian export group projects that nation’s soybean exports for June at 10.79 million tons. APK-Inform sees Ukraine’s sunflower seed exports this marketing year at a record 1.3 million tons, even as export logistics have been complicated by Russia’s invasion.

Corn was sharply lower on fund and technical selling. Corn is watching near-term development weather, with more moderate temperatures against only scattered rain. Still, that lack of rainfall will be an issue and longer-term outlooks generally have above normal temperatures and below normal precipitation for much of the Corn Belt during key development phases. The USDA’s planted area and quarterly stocks numbers are scheduled for June 30th, while the next round of production numbers is out July 12th. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers have been delayed by technical issues at the EIA, while the USDA’s weekly export sales report is on tap for this Friday at 8:30 AM Eastern/7:30 Central.

The wheat complex was sharply lower on fund and technical selling. Wheat resumed liquidation with relative strength in the U.S. dollar against other currencies. The generally bearish tone in commodities and parts of the broader market was also influenced by concerns over a potential global recession. The likelihood of Russia opening an export corridor for Ukraine remains very low. Most of those discussions have been between Russia and Turkey with minimal involvement from Ukraine, but Kyiv and the U.N. have played a bigger role in recent talks. Russia’s invasion of Ukraine has seriously disrupted that nation’s ag industry. Moscow continues to do business despite sanctions from the U.S. and European Union, with Bangladesh reportedly looking for wheat from Russia due to export restrictions by India. That slowdown in sales for India followed significant yield loss caused by hot temperatures during key phases of development. The export slowdowns from Ukraine and India have had no appreciable impact on the pace of U.S. sales.