Slide continues for corn, soybeans, wheat
Soybeans were lower on fund and technical selling. 61% of U.S. soybeans are in good to excellent shape, up 1% on the week, with better conditions reported in eastern growing areas. Near-term weather is likely to cause stress in some key growing areas, but it remains to be seen how much of an impact it’ll have on yields. There’s also the question of how many acres were actually planted this year, with the USDA resurveying producers in some areas after a slow start to the season. There are uncertainties about demand from China, due to a combination of COVID restrictions and tensions over Taiwan. Trade data from Brazil says July 2022 soybean exports were 7.5 million tons, compared to 8.6 million in July 2021. There was also spillover from recent losses in global vegetable oils, especially palm oil, which pulled soybean oil lower, even as crude oil rallied. Soybean meal was up on oversold signals and product spread trade.
Corn was lower on fund and technical selling. 60% of corn is rated good to excellent, unchanged when many were expecting a decline, with another mixed week of weather on tap for the region. Near-term forecasts generally favor eastern growing areas over the western part of the Corn Belt. The USDA’s first official yield estimate of the season is out on the 12th in the monthly supply and demand report. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Trade data from Brazil has July corn exports at 4.12 million tons, compared to 1.99 million last year. The second crop harvest in Brazil is ongoing with CONAB’s next production update out on the 11th. Corn is also watching diplomatic tensions with China, but Brazil is likely largely taken over for U.S. sales to Beijing. That spike in Chinese demand for U.S. corn came after Russia’s invasion of Ukraine, but before China and Brazil signed a deal clearing the way for increased corn trade.
The wheat complex was sharply lower on fund and technical selling. More vessels are reportedly ready to leave Ukraine’s ports following the recent export agreement with Russia brokered by the U.N. It’s going to take some time, and the end of attacks by Russia, to get those ports running at full capacity, but it does ease at least some concerns over global supply and prices. The U.S. winter wheat harvest is advancing and the spring wheat rating improved slightly from last week. That number could come down next week with parts of the northwestern U.S. Plains experiencing hot, dry weather. The trade is also monitoring development weather in Europe, with some of their key growing areas also being hit by hot, dry conditions.