Soybeans roar back, with corn, wheat also higher

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Soybeans roar back, with corn, wheat also higher

Soybeans were sharply higher on commercial and technical buying. Contracts are oversold after the recent losses and bean meal also found new commercial buying interest after its drop. This week’s development weather is mixed and there are concerns about demand from China. China’s grappling with economic uncertainties connected to COVID, while throwing a temper tantrum following recent public U.S. support for Taiwan. All that being said, there’s talk of China buying new crop U.S. beans this week, in addition to some rumored purchases from Brazil. There’s also a seasonal shift to U.S. beans on the horizon. Old crop U.S. soybean export sales were a net reduction for the fifth time over the past six weeks following a cancellation by unknown destinations. New crop sales were down on the week, failing to break 500,000 tons, with unknown and China topping the list of buyers. As far as domestic weather, it looks like there’s potential yield loss in parts of the region due to heat and drought, but also the potential for lost crops due to flooding in portions of the central and eastern Midwest. There is some rain in the forecast for dry areas next week. Soybean oil futures were up on the higher moves in beans and meal, shrugging off a big drop in crude oil.

Corn was higher on commercial and technical buying. Corn is watching the weather, with ideal conditions in parts of the region along with potential flooding in some areas and hot, dry weather in others. Many analysts expect USDA to lower its yield estimate in the next supply, demand, and production update out Friday, August 12th. Weekly old crop export sales were down sharply on the week following a handful of cancellations, but physical shipments matched what’s needed to meet projections for the current marketing year. New crop sales were just a bit over 250,000 tons, primarily to Mexico. China bought a routine amount of old crop U.S. corn last week but no outright new crop sales as Beijing is likely filling most of its needs through Brazil’s new crop. Brazil’s second crop harvest is ongoing with CONAB’s updated outlook scheduled for Thursday, August 11th. The Renewable Fuels Association says June ethanol exports were 101.5 million gallons, a drop of 31% from May, with DDGS exports at 1.01 million tons, up 5% on the month. For the first half of 2022, ethanol exports are 825.7 million tons, up 25% from January to June 2021, and DDGS exports are 5.67 million tons, 5% ahead of last year’s pace. Ethanol and DDGS exports for those six months were both multi-year highs.

The wheat complex was higher on commercial and technical buying. Chicago and Kansas City are watching the tail end of this year’s winter wheat harvest. Minneapolis was supported by concerns about hot, dry weather in parts of the northwestern U.S. Plains. The trade continues to monitor the pace of exports out of Ukraine’s ports following the recent agreement with Russia. Only one vessel has been reported as leaving with as many 17 waiting for clearance to head to their eventual destinations and the potential for more strikes by Russia looming. One of the sticking points in shipping has been insurance for those vessels, but insurers connected to Lloyd’s of London are reportedly ready to cover shipments. Slow export demand for most types of U.S. wheat continues to be an issue, with last week’s sales below a quarter million tons, mainly to unknown and Indonesia. Just over two months into the 2022/23 marketing year, soft red winter and white wheat exports are ahead of the 2021/22 pace while hard red winter and hard red spring are very slow. Algeria reportedly bought a substantial amount of wheat this week from unnamed sellers.