Market News

Demand, weather concerns support soybeans, corn

Soybeans were higher on commercial and technical buying. The trade was watching the weather ahead of the weekly crop progress report. As of Sunday, 98% of U.S. soybeans have emerged and 18% are blooming, both a little faster than their respective five year averages, and 64% of the crop is in good to excellent condition, down 2% on the week. Near term forecasts have more mixed conditions, with generally better weather in eastern parts of the Midwest. Soybean meal was higher, following beans, and oil was steady to firm after an underwhelming announcement of the proposed 2019 RFS for biodiesel. The USDA says May’s domestic soybean crush was 157 million bushels, up 7 million on the month, but down 4 million on the year. According to wire reports, record production in Brazil has led to storage shortages.

Corn was higher on commercial and technical buying. Corn’s also watching the weather while continuing to absorb last week’s USDA reports, especially the increase in the acreage number from March. According to the USDA, 10% of U.S. corn is silking, compared to 13% on average, and 68% of the crop is called good to excellent, up 1% on the week. Ethanol futures were lower ahead of the weekly stocks and production data. The U.S. EPA has proposed to hold the 2018 ethanol RFS at 15 billion gallons. The USDA says corn for alcohol consumption in May was 508 million bushels, up 3% from April and 6% from May 2016. Most of that, 452 million bushels, is for fuel alcohol use. Egypt reportedly rejected 60,000 tons of corn from Ukraine because of ergot concerns.

The wheat complex closed mostly higher on commercial and technical buying. Contacts were down early, but rallied with near term forecasts showing more mostly dry conditions and hot temperatures in the northern Plains. July Minneapolis was the exception, weak in light trade. Global supplies remain large and world growing conditions generally look good. For winter wheat, 53% of the U.S. crop is harvested, compared to 54% on average, and 48% is rated good to excellent, down 1%. For spring wheat, 59% of the crop has headed, compared to 54% normally this time of year, and 37% is in good to excellent shape, a 3% week to week decline. DTN says Algeria bought 420,000 tons of milling wheat from France and “maybe” Argentina. Japan is tendering for 91,660 tons of U.S. food wheat and Egypt is in the market for an unknown amount of milling wheat from Romania.