Soybeans up ahead of USDA numbers as corn, wheat consolidate

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Soybeans up ahead of USDA numbers as corn, wheat consolidate

Soybeans were higher on commercial and technical buying. Soybeans saw decent follow through buying as the trade was getting ready for Thursday’s USDA reports out at Noon Eastern/11 Central. Most analysts expect acreage to be slightly lower than March and there’s a wide range of estimates for quarterly stocks. U.S. development conditions remain mostly favorable, but parts of the Midwest do need more consistent precipitation as the crop move through key phases of development. Soybean meal was up on solid crush demand, which also helped bean oil rally from a brief loss tied to a sell-off in crude oil. The USDA’s weekly export sales report is also out Thursday. Brazil’s grain trade group ANEC estimates June soybean exports at 10.15 million tons, 5.9% less than the initial estimate. CONAB’s new supply, demand, and production numbers are out July 7th.

Corn was mixed, mostly lower, on spread trade and profit taking. Corn consolidated while getting ready for those USDA numbers, expecting a slight increase in planted area with stocks up on the year. Most long-term forecasts have hot, dry weather in much of the region starting in July. That could trim yields, but many recently developed corn varieties do have better resistance to drought than old varieties. The USDA’s next production projection is out July 12th. ANEC sees Brazil’s June corn exports at 2.21 million tons, 2.7% under the guess earlier this month. The U.S. Energy Information Administration says ethanol production last week averaged 1.051 million barrels a day, down 4,000 from the previous week’s delayed data and 7,000 below a year ago. Stocks fell to their lowest level this year at 22.746 million barrels, a decrease of 730,000 on the week, but an increase of 904,000 on the year.

The wheat complex was mixed, with Chicago down, Kansas City up, and Minneapolis mostly lower. Ukraine’s exports continue to be slow following Russia’s invasion, but that hasn’t steered much business to the U.S. There’s talk Russia will recalculate its grain export tariffs due to strength in the ruble. SovEcon estimates Russia’s wheat exports for next marketing year at a record 42.6 million tons, bolstered by record production and the anticipated continued near-total absence of Ukraine from the market. Ukraine’s Ministry of Infrastructure is in favor of a Ukrainian Railways proposal to raise cargo transportation tariffs by 70%, but Ukraine’s Grain Association wants Kyiv to delay that hike for three to six months after the current state of martial law ends. Most of the grains leaving Ukraine for export are traveling by rail. Ukraine’s State Customs Service says 2021/22 wheat exports are 18.72 million tons. France reportedly had the lowest offer in Egypt’s weekly tender. U.S. soft red winter prices are the cheapest on the global market, but that advantage is blunted by freight costs. The World Bank says it will loan $500 million to Egypt to help with wheat purchases, with January through May imports by Cairo falling 24% on the year due to higher prices. Georgia’s government has banned wheat exports until July 4th, 2023 to preserve domestic supplies. U.S. spring wheat acreage is expected to be below March’s projection. Statistics Canada’s planted area numbers are out next week. Reports from Argentina have 40% to 45% of that country’s prime wheat region currently experiencing drought conditions.