Market News

Corn down ahead of expected weekend rain

Soybeans were higher on fund and technical buying, but still finished the week with steep losses. The trade was waiting to see what happened with the forecasted broad rainfall, while finding spillover support from the mostly higher move in bean oil. August is considered to be a more critical month for soybeans, but any rain would help with development. While overall export demand remains slow, as evidenced by the weekly numbers, Mexico did buy 228,600 tons of new crop U.S. beans ahead of the open. The big old crop weekly buyers were Mexico and Japan, with a small amount to China, but also with a cancellation by unknown destinations. Japan was the leading new crop purchaser. Ahead of Monday’s USDA report, analysts expect slight reductions in the U.S. production, yield, and new crop ending stocks projections, with minimal changes for old crop U.S. ending stocks and the global numbers. Weekly export inspections and crop progress and condition numbers are also out Monday, July 12^th. Soybean meal was lower on commercial selling, while bean oil was mostly higher, adjusting spreads, with support from higher moves in canola and palm oil.

Corn was lower on fund and technical selling, capping off a bearish week. Corn was pressured by those forecasts calling for rain across the Midwest, potentially helping the crop during key development phases. Flooding is a possibility, if not a probability, in parts of the region. Old crop exports were up on the week, primarily to Mexico and Japan, and new crop sales were also higher than the previous week, with Mexico and South Korea topping the list. China didn’t buy any U.S. corn last week and there was a significant cancellation by unknown destinations for old crop. The new marketing year for corn starts September 1^st. Monday, the USDA is expected to raise the corn production guess on a higher average yield projection, with tighter old and new crop U.S. and world ending stocks. The corn production estimate for Argentina is expected to be modestly higher, while Brazilian production should be down sharply on the month. At least one ag firm in Brazil is calling second crop yields better than expected, but still short of early season projections. A number of private and governmental groups have downgraded their estimates for Brazil’s second crop recently because of planting delays, dry weather in some areas during key development phases, and a late season frost/freeze event. Ethanol futures were unchanged.

The wheat complex was mixed, mostly higher Friday, but ended the week sharply lower. Rain could miss some of the drier spring wheat growing areas, while heavy rain in some areas is expected to delay winter wheat harvest activity and lead to quality concerns. The global supply fundamentals are bearish, with world new supply and demand numbers also out Monday, July 12^th at Noon Eastern/11 Central. Stateside, ahead of the report, analysts see decreases in production and old and new crop ending stocks estimates, and globally, average expectations have unchanged old crop and slightly tighter new crop carryout guesses. U.S. export sales were up on the week, with the Philippines and Mexico purchasing well over half of the total. A month into the marketing year, the 2021/22 pace trails 2020/21. DTN says Iran bought 130,000 tons of milling wheat from France and the Black Sea region and Algeria picked up 30,000 tons of optional origin milling wheat, while Pakistan is tendering for 500,000 tons of wheat.