Market News

More gains in Minneapolis wheat on weather woes

Soybeans were solidly higher on fund and technical buying. Most weather forecasts have hotter, drier conditions in some key growing areas for at least the next week. Six-to-ten-day outlooks are less worrisome but could change and the anticipated relief might not hit some of the more heavily affected areas. U.S. planting and emergence are ahead of average and the USDA is expected to issue its first condition rating of the season for beans next week. The USDA’s planted area totals are out at the end of the month, along with quarterly stocks. Brazil’s customs data shows May soybean exports were a monthly record at 16.4 million tons, just shy of the all-time high hit in April. Brazil currently has most of the soybean export market share, particularly on sales to China. The USDA’s weekly U.S. sales numbers will be out Friday morning. World vegetable oils were higher heading into the session and bean oil was up, with July closing above $.70 per pound. Bean meal was lower on product spread adjustments.

Corn was lower on profit taking and technical selling. 76% of U.S. corn is rated good to excellent, but that is expected to decline because of weather. Planting and emergence are both ahead of average, with parts of the region either wrapped up or very close to it. Production estimates for Brazil’s second crop are falling because of hot, dry conditions in some of their key growing areas. The latest guess, from StoneX, is 89.7 million tons. The USDA’s next projection is out June 10^th, in the monthly supply and demand report. Customs data from Brazil says May corn exports were 13,919 tons, down sharply on the year, but generally in-line with normal seasonal performance. The USDA’s attaché in Mexico estimates 2021/22 corn production at 28 million tons, compared to 27.235 million for 2020/21, with imports of 17 million tons next marketing year, compared to 16.5 million this marketing year. There’s more talk of interest from China in corn from the U.S. and Ukraine, but nothing significant has surfaced. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Friday.

The wheat complex was mixed. Minneapolis continued to close in on $8 due to the lower spring wheat condition rating and weather forecasts for the northern and northwestern U.S. Plains into Canada. That rating was the lowest for spring wheat since 1988. There are uncertainties about U.S. spring wheat acreage, with some reports of producers terminating their crops because of the drought or near drought conditions. Chicago and Kansas City were mostly lower on spillover from corn and profit taking, monitoring winter wheat development conditions. The USDA’s winter wheat condition rating was up slightly on the week, but below a year ago. There are concerns about drought conditions impacting winter wheat in the western U.S. Plains, along with excessively wet conditions in portions of the central Plains. Aside from dry weather in parts of Russia, global conditions generally look good. Moscow says its weekly formula-based adjustments to export tariffs will not be canceled this year due to strong global demand. The USDA’s attaché for Mexico projects 2021/22 domestic wheat production at 3 million tons, a little bit less than the official guess, but slightly more than the 2020/21 total, with imports of 5.1 million tons for 2021/22, compared to 4.7 million during 2020/21. DTN says Saudi Arabia bought 562,000 tons of wheat and Algeria purchased 200,000 tons of durum, both from unknown origins, while Indonesia is in the market for 240,000 tons of optional origin feed wheat and Iraq has issued an international tender for 60,000 tons of milling wheat.