Market News

Commercial buying, weather support corn, wheat

Soybeans were higher on commercial and technical buying. Old crop exports were a marketing year low following a cancellation by China, but commitments are close to the USDA’s target for 2020/21, and new crop sales were solid, with China the biggest buyer. The new marketing year for soybeans starts September 1^st. The trade is watching harvest activity in South America. Activity is at least 80% in Brazil, while parts of Argentina could see some near-term delays. CONAB estimates Brazil’s soybean crop at 135.54 million tons, up 408,000 from April and 10.695 million from 2020. The trade is also watching conditions in the U.S. ahead of widespread planting. The USDA’s first production guess of the season is out Friday, using a trend-line yield and the USDA’s most recent planted area estimate. Soybean meal was mixed, mostly lower, adjusting spreads, and bean oil was up on solid weekly export sales and a higher move in canola.

Corn was sharply higher on commercial and technical buying. 2020/21 weekly export numbers were good, Japan was the biggest buyer, and corn is monitoring harvest conditions in Argentina, second crop development weather for Brazil, and planting conditions in the U.S. Parts of the Midwest are expected to see more near-term planting delays. Brazil’s second crop is the source of most of their exports and is especially critical because of high domestic prices for the first crop. CONAB has Brazil’s total corn crop at 108.966 million tons, raising the estimate for the first crop, but lower the outlook for the second crop because of expectations for lower yields due to planting delays and dry weather during development. The domestic supply remains tight and U.S. cash prices in the interior are above spot futures. Ethanol futures were higher.

The wheat complex was higher on commercial and technical buying. Minneapolis took the lead again on dry weather in the northern U.S. Plains and Canada, bringing Chicago and Kansas City along for the ride. There’s also increasing talk of using wheat as a substitute for corn in livestock feed rations. The USDA could raise the feed wheat use guess Friday in this month’s supply and demand update. Old crop export sales were a marketing year low, while new crop topped expectations. China had a significant cancellation of old crop U.S. wheat, but was the leading purchaser for new crop. The new marketing year for wheat gets underway June 1^st. Global crop conditions generally look good and the supply fundamentals continue to be bearish. DTN says Taiwan bought 96,485 tons of U.S. milling wheat and Japan picked up 90,815 tons of food wheat from the U.S. and Canada, while Thailand purchased 58,000 tons of optional origin feed wheat.