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Corn drops, soybeans, wheat also lower

Soybeans were lower on fund and technical selling. U.S. planting is ahead of average at 75% complete and development conditions mostly look good in many key U.S. growing areas. Still, there are at least a couple of weeks until the crop is fully planted and there’s a long way to go until harvest. There’s some expectation that producers have planted more beans than initially projected to meet demand estimates, lower domestic prices, and bolster the supply. That might not be fully reflected until the August supply and demand report. The trade is also monitoring domestic and long-term export demand. U.S. processor bids have moved lowered lately, but the domestic supply continues to be tight, and while Brazil has taken over the export market, especially to China, that’s due to the tight U.S. supply and seasonal factors. Soybean meal was sharply lower and bean oil was sharply higher on aggressive product spread trade. Bean oil had additional support from a rally in global vegetable oil prices ahead of the regular U.S. session.

Corn was sharply lower on fund and technical selling, with July touching limit down, but closing slightly above that mark. Corn planting and emergence are both ahead of average, with rain in the forecast for many areas this week. That will slow down planting, but the soil moisture should be beneficial to the crop long-term. The USDA is expected to issue their first condition rating of the season for corn in next week’s crop progress and condition report, out Tuesday, June 1st because of Monday’s Memorial Day holiday. Weekly export inspections will also be out next Tuesday instead of Monday. There’s light rain in the forecast for Brazil, but most of their second crop growing areas remain dry. Some yield loss has been incurred by hot, dry weather, with most estimates now sitting well below the USDA guess made earlier this month. The USDA’s attaché for Romania estimates 2021/22 corn production at 13 million tons, up 21% from 2020/21, with the office also expecting a solid increase in exports. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was lower on fund and technical selling. Chicago and Kansas City led the way down, watching winter wheat development conditions, including rain in parts of the Plains and Midwest, with Minneapolis following their lead, unable to follow through on early modest gains. The USDA’s winter wheat condition rating was down modestly on the week and below a year ago and just 45% of the spring wheat crop is in good to excellent shape, with 41% called fair and 14% in poor to very poor condition. That is the lowest first good to excellent rating of the season for U.S. spring wheat since the late 1980s. While parts of Russia do need rain, global conditions are generally good. Ahead of widespread planting, conditions in Australia are pointing to second consecutive larger than average crop. The USDA’s next set of production projections is out June 10th in the regular monthly supply and demand report. DTN says Egypt bought 240,000 tons of wheat from Romania for August delivery. The USDA’s attaché for Romania estimates 2021/22 wheat production at 9.1 million tons, up sharply from 2020/21, with exports potentially rising 54%. Russia’s new export tax system starts June 2nd.

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