Market News

Bearish run continues for soybeans, corn, wheat

Soybeans were lower on fund and technical selling, with nearby months down sharply Friday, adding to what were already big weekly losses. Contracts were up early but could not follow through due to slow export demand and crude oil selling off. Near-term planting weather is favorable in most of the Midwest and Plains. Brazil continues to hold most of the export market, but that could shift as their prices move higher with harvest essentially wrapped up. Argentina’s harvest is ongoing with production considerably smaller than last year because of drought. The USDA’s next round of supply, demand, and production estimates is out June 9th. Soybean meal extended its slide and bean oil finished lower under the weight of soybeans and crude oil. Bean oil was also up prior to selling off, with early support from a rally in palm oil and those initial gains in crude oil. Crude oil and some other parts of the broader market gave up their gains after the suspension of debt ceiling negotiations.

Corn was lower on fund and technical selling, ending the week in the red. Corn was higher to start the session but slow export demand following cancellations by China and good planting weather continue to hang over the market. There’s a long way to go in the growing season, but for now, projections mostly show a record large U.S. crop. Record large production is also likely in Brazil, but there are concerns about the potential for a drier pattern or a frost/freeze event ahead of harvest. The USDA’s Cattle on Feed report should give some clues for livestock feed demand. The numbers show continued contraction, with the total, placements, and marketings all below April 2022. Feed prices have declined, which could help improve the already solid demand, but that could be blunted by further tightening of market ready numbers and dwindling placements.

The wheat complex was sharply lower on fund and technical selling, cementing significant week-to-week losses. Rain in parts of the Plains is too late to do much for this year’s hard red winter crop, with some states expecting multi-decade lows in production because of drought. Soft red winter is mostly in comparatively good condition and forecasts have improved planting conditions for spring wheat in the northern Plains. The USDA’s weekly crop progress and condition numbers are out Monday afternoon. The trade is also watching dry planting weather in parts of Argentina, Canada, and Russia. Russia continues to control the export market with their prices near two-year lows. It remains to be seen what concessions were made to Moscow to secure the 60-day extension of the Black Sea Grain Initiative. Russia has significantly slowed down inspections of Ukrainian vessels attempting to leave ports covered by the agreement, while attacking areas near those ports and reportedly stealing Ukrainian grain. The war is expected to intensify this summer.

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