Market News

Corn up on continued demand from China

Soybeans were modestly lower on fund and technical selling. It was an up and down day for beans, with some influence from the recent mostly lower move in world vegetable oils and lower cash basis bids in parts of the U.S. The trade is also monitoring U.S. planting and development conditions, waiting to see if there’s a bump in acreage as some analysts are expecting. The USDA’s next set of supply, demand, and production numbers out June 10^th could provide some planted area clues, but any significant adjustment would likely wait until August. The near-term supply continues to be tight. Weekly export numbers continue to show the impact of high prices and Brazil’s role in the global market. Still, the pace of shipments and sales remains on pace to meet USDA projections for the 2020/21 marketing year, which runs through the end of August. The big weekly buyers were Japan for old crop and Mexico for new crop. Argentina’s Ag Ministry says producers have sold 18.5 million tons of 2020/21 soybeans. China’s General Administration of Customs says April soybean imports were 7.45 million tons, up 11% from April 2020, with 5.08 million tons of that from Brazil and 2.15 million tons from the U.S. Soybean meal and oil were modestly lower on commercial spread trade and demand uncertainties.

Corn was higher on fund and technical buying. There have been new crop corn sales for ten business days in a row, with a running total of 11,043,600 tons, mostly to China. The USDA expects China to buy 26 million tons of corn during the 2020/21 marketing year. Thursday’s purchase was for 1.224 million tons. Weekly old crop numbers weren’t great, but new crop was stellar at more than 4 million tons, with more than 3 million of that to China and the rest to Mexico. The trade is also monitoring U.S. conditions and the continued stress for Brazil’s critical second crop. AgroConsult pegs Brazil’s second crop at 66.2 million tons, compared to 78.3 million in the previous projection, with total production at 91.1 million tons, well below the last guess of 91.1 million tons. The USDA’s attaché for Ukraine estimates 2021/22 corn production at 38.274 million tons, a little bit less than the official guess, but up from the 2020/21 total of 31.871 million tons. Exports are seen at 29 million tons, also a little bit less than the official projection, but above the previous marketing year. Ethanol futures were unchanged. DTN says South Korea bought 65,000 tons of optional origin corn.

The wheat complex was mixed, mostly modestly lower. Wheat was watching rain coverage and totals in the Plains, along with results from a major winter wheat crop tour. There’s been a wide range of yields from that tour, but the average is better than 2019, and Kansas could produce a very large crop this year. Weekly U.S. export numbers were neutral to bearish, with Indonesia taking the top slot for 2020/21 and unknown destinations leading the pack for 2021/22. The new marketing year for wheat starts June 1^st. Near-term global development conditions generally look non-threatening. There are concerns about a drier pattern in parts of Russia early next month, but that is still a couple of weeks away. The USDA’s attaché for Ukraine pegs 2021/22 wheat production at 26.841 million tons, quite a bit less than the official estimate from earlier this month of 29 million tons, but up from the 2020/21 total of 25.42 million. New crop exports are estimated at 18.5 million tons, also below the WASDE projection, but above old crop. DTN says Algeria bought 300,000 to 400,000 tons of optional origin milling wheat.