Early soybean gains evaporate, corn moves mostly lower
Soybeans were lower on fund and technical selling. Contracts were up early, but unable to follow through as soybean products and crude oil turned lower. Crush margins and supply and demand fundamentals remain bullish for the soy complex. The NOPA’s member crush report for May is out Wednesday. 70% of the U.S. crop is rated good to excellent with planting matching the average pace. Planting and development conditions generally look favorable, but there could be some damage if these hotter temperatures stick around for a while and rain is scarce in parts of the region. APK-Inform is expecting lower than a year ago sunflower production for Ukraine because of a decline in planted area following Russia’s invasion. Ukraine is, in a normal year, the world’s biggest exporter of that key vegetable oil. APK-Inform is also anticipating a smaller soybean crop for Ukraine against a bigger rapeseed crop. Brazil’s trade ministry says May soybean exports were 10.633 million tons, the lowest for the month in five years and down 29% from May 2020. China has left their 2022/23 soybean import guess at 95.2 million tons. The USDA’s next projection is out July 12th.
Corn was mostly lower. 72% of corn is rated good to excellent, down 1% on the week, with planting close to wrapping up in many key growing areas. The USDA’s planted area totals and quarterly grain stocks numbers are scheduled for June 30th. Mexico bought 148,000 tons of U.S. corn, including 103,000 tons of old crop. The European Union’s crop agency MARS sees Ukraine’s corn crop at 35.3 million tons, a year-to-year decline of 16% following Russia’s invasion. UkrAgoConsult projects production at 25.7 million tons. AgRural says 7% of Brazil’s second corn crop is harvested, with the nation’s trade ministry reporting May exports at 1.166 million tons, up sharply on the year. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.
The wheat complex was lower on fund and technical selling. Winter wheat is 10% harvested, with generally good conditions in the near-term forecast. Some areas will see some near-term delays, but most of the region is expected to see a warmer, drier pattern, which would keep harvest in high gear in the southern Plains and help portions of the eastern Midwest dry out. The USDA’s first spring wheat rating of the season was lower than expected, but still well above a year ago. U.S. spring wheat planting remains slower than average, but is close to completion, while Canada has mostly wrapped up planting this year’s crop. The chances of Russia allowing a Black Sea corridor for Ukraine’s grain exports remain low due to continued hostilities by Moscow and low odds of repealed sanctions for the invasion. Ukraine reportedly only has 60 million tons of grain storage capacity remaining due to the slow exports and Russian occupation. APK-Inform sees Ukraine’s wheat crop at 26.9 million tons, 16% below a year ago due to a decrease in planted area. UkrAgroConsult has the crop at 20 million tons, closer to Ag Ministry expectations. There are reports Argentina will cap wheat exports at 10 million tons this marketing year, below the most recent USDA guess.