Soybeans were higher on technical and speculative buying, along with spillover from wheat. Overall, the supply is tight and demand continues to look solid with weekly export sales towards the high end of estimates; old crop shipments were slow. Near term crop weather does look generally good but with the calendar turning towards August, traders are willing to take a step back and put some weather premium in due to the uncertainty. Soybean meal and oil were higher following the lead of soybeans. China bought 2009/10 tons of U.S. soybean oil, continuing their at least near term shift to U.S. supplies because of Beijing’s trade dispute with Argentina.
Corn was higher on technical buying and spillover from wheat. Also, even while the crop does look good overall, there are concerns about yield and quality. Forecasts for the coming week do have a hot, dry pattern and parts of the Eastern and Southern Cornbelt definitely need rain, but most traders took a wait and see attitude. Ethanol futures were higher. Ahead of the open, Mexico picked up 146,000 tons of U.S. corn (30,000 tons 2009/10 and 116,000 tons 2010/11). According to the International Grains Council, the U.S. is expected to see increases in exports of both corn and feed wheat to make up for global weather problems impacting wheat production.
The wheat complex was higher on fund buying and short covering. Weekly export sales were solid, including sales to Egypt, and the trade continues to watch weather and its impact on crops in Russia and the Black Sea region. That said – at least some of that is priced in right now and traders continue to keep an eye on U.S. and world harvest numbers. The International Grains Council has the global crop at 651 million tons, down from earlier projections, but still the third largest in history. According to the Wheat Quality Council’s spring crop tour, hard red spring yield is currently calculated at 46 bushels per acre and durum is seen at 38.4 bushels per acre, up from last year for both types. European wheat did see some profit taking after an earlier rise to two year highs with November and London Paris both down .8% on the day. Japan’s Ag Ministry issued a tender for 141,567 tons of wheat (70,101 tons U.S. dark northern spring, 36,126 tons Canadian western red spring and 35,340 tons Australian standard white).
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