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Profit taking pressures soybeans

Soybeans were lower on profit taking and technical selling. Contracts saw a correction after Thursday’s post-USDA report gains. The acreage number lower than anticipated and while stocks are ample, demand remains solid. Also, a lot of the U.S. soybeans sold following the South American crop losses were new crop, not old crop. Soybean meal and oil futures were lower, following beans. China bought 40,000 tons of 2016/17 U.S. soybean oil. According to the USDA, May’s domestic soybean crush was 161 million bushels, compared to 158 million in April and 156 million in May 2015.

Corn was lower on fund and technical selling. There were forecasts for scattered, occasionally heavy, rainfall this weekend as the crop heads towards pollination. Demand is good, but contracts have lost a lot of ground recently. With a recent new set of lows, it’ll be interesting to see where the markets go Tuesday, July 5th, after the holiday. Ethanol futures were steady to higher. According to Allendale, Brazil canceled plans to auction a half million tons of corn from state reserves, citing a decline in price. During May, the USDA says total corn consumption for alcohol and other uses was 479 million bushels, up 7% on the month, but down 5% on the year. For fuel alcohol, use was 426 million bushels, 8% more than the year before, but 5% less than last year.

The wheat complex was lower on fund and technical selling with September Chicago making a new contract low and spot prices at their lowest level in nearly a decade. The fundamentals are bearish with a large world supply and slow export demand for U.S. wheat. Export numbers are ahead of last year, but it’s very early in the marketing year. Taiwan is tendering for 106,300 tons of U.S. milling wheat.