Market News

Another down day for soybeans, corn, wheat

Soybeans were sharply lower on fund and technical selling. Near-term forecasts generally have favorable planting weather in most of the Midwest and Plains. The national planting pace should be well over the halfway mark by this weekend. The USDA is projecting a record large crop, with the next production estimate out June 9^th. Brazil’s record large harvest is essentially over, sending their basis sharply lower, which could help U.S. exports, especially if prices continue to fall. There’s just over a quarter remaining in the current marketing year for U.S. beans and corn. Crop losses in Argentina have been priced in and any significant bump in demand for U.S. soybean products has yet to materialize. Argentina is typically the world’s largest exporter of soybean meal and oil. Soybean product futures were down, following beans, but bean oil did bounce off the day’s lows thanks to a rally in crude oil.

Corn was lower on fund and technical selling. Corn is watching U.S. planting weather, expecting good progress in most of the region over the next few days. The USDA is estimating record production this year, but there’s a long way to go in the growing season. China canceled on more old crop U.S. corn, another 272,000 tons, reflecting the bearish export outlook. There’s some talk, but no confirmation, China has been buying second crop corn from Brazil ahead of that harvest. The USDA’s weekly sales numbers are out Thursday. The U.S. Energy Information Administration says ethanol production last week averaged 987,000 barrels a day, up 22,000 on the week, but down 4,000 on the year, and stocks fell to their lowest level since last November at 23.191 million barrels, a decline of 100,000 from the previous week and 600,000 from a year ago.

The wheat complex was lower, with Chicago and Minneapolis down sharply, on fund and technical selling, along with the higher trade in the dollar during the session. A major hard red winter crop tour is projecting low yields and high rates of abandonment in the Plains, but that seems to be factored in. Soft red winter is in relatively good condition and while spring wheat planting is slower than average, forecasts generally have a warmer, drier weather outlook for most of the northern U.S. Plains. Dry weather in Argentina, Canada, and Russia could impact planting in those nations. The Black Sea Grain Initiative has reportedly been extended two months. That follows speculation the pact would not be renewed. Details are still sparse, but Russia had been pushing for an end to sanctions, even as Moscow steps up its offensive on Ukraine. The war is also impacting spring grain planting in Ukraine.