Corn up, soybeans mostly firm, watching weather
August 5, 2021 By John Perkins Filed Under: Closing Futures / Livestock Briefs, Crops Markets, Market News
Soybeans were mostly modestly higher, adjusting spreads. Unknown destinations bought 300,000 tons of new crop U.S. beans and last week’s new crop sales were solid. Old crop sales were bearish, continuing to slide into the end of the 2020/21 marketing year, with most export needs covered, for now, by Brazil or other sellers. Unknown destinations and China both canceled on old crop U.S. beans last week but were the leading buyers for new crop. Most forecasts have broad rain coverage over the next week, including in some of the drier parts of the region. That said – some areas are in for another stretch of hot, dry conditions during key development phases. Soybeans will need a trend-line yield or better to meet demand expectations and bolster what are already expected to be historically tight supplies through next marketing year. The next set of supply, demand, and production numbers is out August 12th. Soybean meal was higher and bean oil was lower, adjusting product spreads.Corn was modestly higher on commercial and technical buying. Corn is also watching the weather and any clues about yield and production ahead of next week’s USDA numbers. Similar to beans, corn will also need a good yield this year to meet demand and boost what are projected as tighter than normal supplies through the end of the 2021/22 marketing year. The new marketing year for corn starts September 1st. China cancelled on old crop U.S. corn last week, while Mexico was the big buyer for new crop. The trade is also watching yield results from the slower than average second crop harvest in Brazil. That crop has been hit hard most of the season, steadily pulling estimates lower over the past few months, causing Brazil to import corn to meet feed needs, while slowing down export sales. CONAB’s next production estimate is out August 10th. Ethanol futures were unchanged. The Renewable Fuels Association says June ethanol exports of 81.9 million gallons were up 16% from May, with most of that headed to Canada, South Korea, and Peru. There were no reported sales to China or Brazil. DDGS exports were 939,177 tons, down 10% on the month, primarily to Mexico, Vietnam, and South Korea.The wheat complex was mixed. Minneapolis was modestly higher as it remains to be seen just how much rain in the spring wheat region can help at this stage. The same conditions that have impacted spring wheat in the northern and northwestern U.S. Plains into Canada are also expected to limit new crop white winter wheat acreage. Chicago and Kansas City were down, watching the tail end of this year’s winter wheat harvest. Production estimates for Russia are falling due to hot, dry weather in key growing areas and there are concerns about quality in China and parts of Europe following flooding. Export sales were bearish, but demand is broadly showing signs of improving. The big weekly buyers were Mexico and South Korea. Turkey bought 245,000 tons of wheat and Algeria purchased 200,000 tons, while Pakistan is tendering for 400,000 tons of wheat and Japan has issued an additional tender for 80,000 tons of wheat, on top of their current open tender for 119,435 tons from the U.S., Australia, and/or Canada. Still, only limited amounts of business will go to the U.S. and about two months in, 2021/22 sales are well behind 2020/21.
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