Corn, wheat see more losses
Soybeans were mostly higher on spread trade and technical buying. Beans are oversold and due for a bounce, with help from solid weekly new crop sales and strong crush margins. Old crop sales fell sharply from last week following a handful of small cancelations with minimal interest from China, while new crop sales were more than 2.6 million tons, led by unknown destinations and China. It looks like buyers are trying to lock in supplies after Brazil’s exportable surplus is exhausted. Thursday morning, China bought another 134,000 tons of U.S. beans for 2023/24 delivery. Near and medium-term weather forecasts generally look beneficial, likely stabilizing, if not improving, yield potential during some key development phases. However, even with a week-to-week improvement, drought continues to be a big concern in the Midwest and Plains. Soybean meal was mostly higher, following the lead of beans, while bean oil was down on profit taking. Weekly soybean meal sales were solid, filling part of the vacuum left by Argentina, but bean oil sales were neutral to bearish.
Corn was lower on fund and technical selling. More rain has fallen in some of the drier parts of the region, potentially having an impact on crop potential. Still, drought remains a big factor in parts of the region and a lot of this recent rainfall and cooler temperatures came after some of the key development dates for corn. The USDA’s next set of yield and production estimates is out next Friday, the 11th. Old crop export sales were below a week ago and smaller than average, mainly to Japan and Egypt, but with a significant cancellation by unknown destinations. New crop sales failed to break 350,000 tons, with Honduras and Mexico topping the list. Assuming that cancellation by unknown was China, Beijing continues to look elsewhere for corn. That’s been largely Brazil and Ukraine, but Ukraine’s near total absence from the export market and the uncertainties about their return could open up some opportunities for U.S. corn. The USDA’s attaché in the European Union projects 2023/24 corn production for the bloc at 60 million tons, less than the official guess, but more than 2022/23. Imports in the coming marketing year are expected to be 22.5 million tons, compared to 24.5 million this marketing year due to a larger domestic crop.
The wheat complex was lower on fund and technical selling. The complex followed the recent trend but is starting to look oversold. Weekly U.S. sales are solid, there are global weather concerns, and some of Russia’s wheat has seen a cut in quality. Weekly wheat exports were up sharply from the previous report and larger than average, with solid demand from China and Mexico. There were also some early sales for next marketing year. However, for now at least, Russia remains the dominant factor on the global market due to a big price advantage. There’s talk that India is interested in buying wheat from Russia due to their high domestic prices and expectations for a smaller harvest this year. The USDA’s attaché for the European Union estimates 2023/24 wheat production at 134.6 million tons, less than the official guess of 138 million but up from the 2022/23 total of 134.17 million thanks to weather improvements. 2023/24 wheat exports are expected to be 34.8 million tons, compared to 34.74 million for 2022/23.