Soybeans, soybean products extend gains
Soybeans were sharply higher on commercial and technical buying. Most forecasts continue to show a return to hot, dry weather in many areas next week, potentially impacting yield. August is the critical month for most of the U.S. soybean crop. The USDA’s first official yield guess of the season is out August 12th, along with updated acreage numbers following a USDA resurvey of producers. Planting was delayed in some areas by excessive rainfall and likely led to at least some replanting and acreage switching. Soybean meal was up sharply again thanks to strong domestic demand and palm oil futures were higher ahead of the U.S. session, supporting soybean oil. Meal and oil also picked up additional support from solid crush margins. The USDA’s weekly export sales numbers are out Thursday morning.
Corn was modestly higher on commercial and technical buying. Corn was watching development conditions and the potential yield impact from hotter, drier weather in some key growing areas. July’s a bigger month for corn than August, but given demand prospects, any potential crop loss would just lead to tighter supplies over the next couple of marketing years. Export demand has slowed down, but ethanol demand is solid. The U.S. Energy Information Administration says ethanol production last week averaged 1.021 million barrels a day, down 13,000 on the week, but up 7,000 on the year, with a supply of 23.328 million barrels, a decrease of 225,000 from the previous week, but an increase of 595,000 from a year ago. The USDA’s attaché in Argentina sees 2022/23 corn production at 53 million tons, compared to the prior estimate of 55 million tons and the 2021/22 total of 52 million, with exports this marketing year pegged at 38.8 million tons, compared to 38 million last marketing year. Harvest is ongoing for Argentina and Brazil.
The wheat complex was lower on profit taking and technical selling. Russia’s incursion into Ukraine continues to limit export availability from the Black Sea region. Additionally, weather has impacted production in Europe. Those factors could lead to improvements in demand for U.S. wheat this winter, but for now, exports remain slow. This week’s spring wheat crop tour is showing good results in the northern U.S. Plains. The USDA’s attaché in Canada estimates 2022/23 wheat production at 33.5 million tons, compared to the USDA’s last official guess of 34 million tons and the 2021/22 total of 21.652 million tons. Canada’s exports during the upcoming marketing year are seen at 24 million tons, compared to 15.6 million last year. The attaché in Argentina projects 2022/23 wheat production at 18.5 million tons, compared to the last official estimate of 19.5 million tons and the 2021/22 total of 22.5 million tons. Exports next marketing year are expected to be 12.35 million tons, compared to 16.2 million this marketing year. India’s domestic wheat prices are at record highs due to solid demand and a smaller than expected crop.