Market News

Corn up, soybeans down ahead of USDA numbers

Soybeans were lower on profit taking and technical selling but finished towards the lower middle of the day’s range. There was more rain in the near-term forecast for some of the drier parts of the region. Longer-term outlooks generally show a return to drier conditions, potentially causing crop stress. The trade is also waiting to see what the USDA reports for total 2021 planted area on June 30^th, with many expecting the final to be above what the USDA was projecting in March. Any changes to the production are likely to be modest until after that report as the USDA has rarely ever adjusted the U.S. bean yield prediction in the June supply and demand report. Quarterly grain stocks numbers are out also out at the end of June. This Thursday, the USDA is expected to raise old crop U.S. and world ending stocks estimates, while lowering the new crop U.S. outlook a little. The trade is also waiting to see what adjustments the USDA will make to production guesses for Argentina and Brazil. Soybean meal was mostly lower, adjusting spreads, and bean oil was down on profit taking, but like beans, closed well above the day’s lows.

Corn was higher on commercial and technical buying, bouncing off the session lows. Corn is also watching the weather, expecting beneficial near-term rains in parts of the region, but with some longer-term uncertainties. Forecasts for central Brazil remain dry, further limiting second crop potential in that area and their export potential, some of which would switch to the U.S. and Ukraine. There are reports of Argentine corn landing in Brazil to make up for the shortfall of their first crop. CONAB’s new production estimate for Brazil is out Thursday morning. Recent private estimates have total production around 90 million tons, well below the May projections. Thursday, the USDA is expected to lower old and new crop U.S. and world ending stocks projections and cut the production guess for Brazil. The trade is also waiting to see if China bought or canceled old crop U.S. corn last week, with the sales numbers out at 8:30 AM Eastern/7:30 Central. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production averaged 1.067 million barrels a day, up 34,000 on the week and 230,000 on the year, while stocks hit a five-week high at 19.96 million barrels, an increase of 372,000 from the previous week, but a decrease of 1.842 million from this time last year.

The wheat complex was mixed. Minneapolis was down on the recent rain in the spring wheat region, including Canada, while Chicago was lower on early harvest pressure. Kansas City was modestly higher ahead of Thursday’s supply, demand, and production numbers, out at Noon Eastern/11 Central. Ahead of the report, most analysts expect the USDA’s all wheat production estimate to be up from May, with increases for hard and soft red winter canceling out a decrease for white winter, linked to condition concerns in the northwestern U.S. Plains. Old crop U.S. and world wheat ending stocks are expected to be slightly lower than last month, with modest increases for new crop U.S. and world carryover. The new marketing year for wheat started June 1^st. Global conditions generally look good, but spring wheat growing portions of Russia could use some rain. DTN says Algeria bought 400,000 tons of milling wheat from an unknown origin.