Market News

Corn, wheat drift lower, watching weather

 

Soybeans were modestly higher on short covering and technical buying. Contracts were due for a bounce, as beans continue to watch U.S. planting conditions and trade negotiations. Weekly export numbers were bearish, with no old crop sales to China. There were, however, some new crop sales, and China has yet to enact a proposed 25% import tariff on U.S. beans ahead of new talks. Beijing may eventually add that tax but will have to turn to the U.S. for most of their soybean needs eventually. For now, stocks are ample, with China’s National Grain and Oil Information Center stating supplies are at a four-year high, with demand slowing because of poor processing margins. Stateside, the trade is keeping an eye on the possibility of higher than expected acreage, with new planting numbers out on the 29th. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The Buenos Aires Grain Exchange says 89.3% of Argentina’s weather damaged soybean crop has been harvested. The USDA reports the domestic soybean crush in April was 172 million bushels, down 10 million on the month, but up 22 million on the year.

Corn was modestly lower on fund and technical selling. Near-term forecasts had rain in parts of the Midwest and Plains, followed by warmer, drier weather in parts of the region. The USDA’s first crop condition rating of the season was historically high and planting could be essentially wrapped up soon. The trade also continues to watch forecasts for mixed, mostly dry, weather for Brazil’s second crop, the larger of the two and source of most of their exports. Ethanol futures were narrowly mixed. The USDA reports corn consumption, for alcohol and other uses, during April was 498 million bushels, 5% less than March, but 2% more than April 2017. Corn for fuel alcohol made up most of the total, 445 million bushels, also down on the month, but up on the year. DDG production was 1.83 million tons.

The wheat complex was modestly lower on fund and technical selling, along with the higher U.S. Dollar index. Most forecasts had rain in spring wheat growing areas of the U.S. and Canada with more dry weather in much of the southwestern U.S. Plains ahead of the winter wheat harvest. The USDA’s first harvest estimate is expected to be out this coming Monday. Global growing conditions generally look good. Weekly export numbers were bearish, with one reporting week left in the 2017/18 marketing year for wheat. The USDA’s next set of supply and demand estimates is out June 12th. DTN says Algeria bought 90,000 to 120,000 tons of milling wheat, “likely” from France. Ukraine’s weather agency projects 2018 winter wheat production at 24 million tons, down 1.4 million on the year because of dry spring weather.