Corn up, soybeans, wheat mixed, back to watching weather
Soybeans were mixed, adjusting old crop/new crop spreads. The USDA raised old and new crop U.S. ending stocks projections on lower old crop crush demand. Still, even with those increases, the supply is expected to remain historically tight the rest of this marketing year through next marketing year, which doesn’t wrap up on the end of August 2022. The trade is now focused on development weather and the 2021 planted area totals out on June 30th. Near-term forecasts do have rain in some dry parts of the region, but longer-term outlooks continue to be a little more uncertain. There were no changes to the South American export or Chinese import estimates. CONAB did raise the old crop soybean production and export estimates for Brazil. Weekly old crop U.S. export sales were bearish at just 600,000 bushels, while new crop wasn’t much better at 3.9 million. China didn’t buy either old or new crop and while unknown destinations did buy a small amount of new crop, it canceled on a substantial amount of old crop. Still, that’s not entirely unexpected because of price and seasonal factors and the overall pace remains on track to meet or exceed USDA expectations. Soybean meal was mostly lower and bean oil was mostly higher, with both featuring spread adjustments. Argentina’s soybean crush for April was reportedly at six-year high at 4.2 million tons, following an increase in farmer selling. Argentina is the world’s biggest exporter of soybean products.
Corn was modestly higher on commercial and technical buying. The USDA lowered old crop ending stocks on higher ethanol and export demand, which reduced the new crop outlook. Those numbers will likely be trimmed again next month and will greatly depend on the size of this year’s U.S. crop, in addition to demand. The USDA’s quarterly grain stocks numbers are out June 30th. The USDA and CONAB both lowered their estimates for Brazil’s corn crop and old crop exports, with CONAB’s production guess now below the USDA. That number could also be trimmed further, depending on weather in central Brazil. Argentina’s production and export numbers were unchanged on the month, as were the import projections for China. Old crop export sales were down sharply on the week, but did feature a routine sale to China, and old crop did top new sales by a wide margin. Some buyers are likely taking a wait and see attitude because of price. The reduction in Brazil’s second crop will likely send at least some business to the U.S. Brazil is importing corn from other South American nations following a shortfall in their first crop. Ethanol futures were unchanged.
The wheat complex was mixed, mostly higher. The USDA raised the winter wheat production guess to just over 1.3 billion bushels with an increase in the average yield estimate. New crop U.S. ending stocks were down on the month, with better feed use and tighter old crop stocks cancelling out that increase in production. Globally, the wheat adjustments were mostly minimal, but the department did raise 2021/22 new crop ending stocks and production estimates for the European Union, Russia, and Ukraine. IKAR now sees Russia’s 2021 crop at 82 million tons, up 2 million from the last guess, while Strategie Grains has the European Union at 131.1 million, with both of those guesses below the new USDA numbers. The next set of supply, demand, and production numbers is out July 12th. The trade’s focus is back on weather, especially the development conditions in the spring wheat growing region and harvest weather for winter wheat. Weekly export sales were 12 million bushels, with South Korea and the Philippines taking the top two slots. The USDA says 2020/21 sales were 24,806,600 tons, compared to 24,812,200 for 2019/20. The new marketing year on wheat started June 1st. DTN says Japan bought 181,355 tons of food wheat from the U.S., Australia, and Canada and Tunisia purchased 50,000 tons of soft wheat from an unknown origin, while Ethiopia is in the market for 400,000 tons of feed wheat and Japan issued a sell-buy-sell tender for 80,000 tons of food wheat.