Mixed finish to a bearish week for soybeans, corn, wheat
Soybeans were mixed, ending the week with significant losses. Beans were down for most of the session on slowing export demand, with more talk of cancellations by China. The previous week’s old export sales were a market low for the fourth consecutive week, with the last three of those being net cancellations. Most of those cancellations were officially by unknown destinations, which probably would have turned out to be China. Those cancellations can be linked to the cost of U.S. beans as opposed to Brazilian supplies. Still, that overall pace of sales from Brazil is slower than average. Most forecasts have hot, dry weather in many key U.S. growing areas heading into August, a critical time for development, providing some support. Soybean meal was sharply lower and bean oil was higher on the aggressive unwinding of recent product spreads. Bean oil picked up additional support from the higher move in crude oil. Reports from Indonesia have the government examining ways to increase palm oil exports. In Argentina, farmers are reportedly holding off on selling recently harvested soybeans due to high inflation. The harvest is also slower than normal at 46% complete, compared to 57% a year ago. The NOPA says member firms crushed 164.677 million bushels during June, down from May.
Corn was mixed, posting a relatively moderate week-to-week decline when compared to beans and wheat. Corn was watching development weather, with the significant potential in part of the region for crop stress during the pollination phase. The USDA’s first official yield projection of the season will be out August 12th in the monthly supply and demand update. Export demand is slow, but domestic demand continues to be solid. There was a new crop export sale to China announced ahead of the open, which would have been the first announced corn sale in a month and the first announced purchase by China in two months, but that was retracted before Noon Central, with the USDA citing updated information from the exporter. China had made several purchases of U.S. following Russia’s invasion of Ukraine, but that demand tailed off after a corn import agreement was reached between China and Brazil. Brazil’s second crop corn harvest is around 50% complete.
The wheat complex was mixed, mostly lower, while finishing out the week with big drops in the most active months. The trade was waiting to see there was any news out of the recent meetings on Ukraine’s exports. There were some reports of progress Thursday following discussions between Russia, Ukraine, Turkey, and the U.N., but nothing firm materialized Friday. Russia’s Ministry of Agriculture says the running total for that nation’s winter wheat crop is 15.5 million tons, with the overall pace ahead of a year ago. Ukraine’s Ag Ministry says 10% of this year’s grain crop has been planted, adding it expects 18 million to 19 million tons of grain to be harvested this year. The most recent U.S. export numbers were solid, but overall demand has been very slow for months.