Market News

Soybeans, corn down, expecting better planting weather

Soybeans were sharply lower on speculative and technical selling, in addition to spillover from the broader market. Most of the Midwest is expected to see hot, dry weather over the next few days, allowing planting to pick up steam. The USDA says 12% of U.S. soybeans are planted, compared to the five-year average of 24%, with 3% emerged, compared to 4% on average. Domestic crush demand is strong with very good margins, but there are concerns about export demand from China due to COVID lockdowns and economic uncertainties. China’s General Administration of Customs says April soybean imports were 8.08 million tons, up on the month and the year, as shipments delayed by slower than normal harvest activity in South America arrived. Year-to-date imports by China are 28.36 million tons, slightly behind the year ago pace. U.S. export inspections were down from the previous week but up from last year, mainly to China and Indonesia. Soybean meal and oil were lower on the fundamental implications of a larger U.S. crop and spillover from the outside markets.

Corn was lower on speculative and technical selling, along with outside market influence. Corn was also watching U.S. planting weather ahead of the weekly USDA crop numbers. As of Sunday, 22% of U.S. corn is planted, compared to the normal rate of 50%, while 5% has emerged, compared to 15% typically in early May. Hot, dry weather is impacting second crop production in central Brazil, likely lower yield. Parts of Argentina are dry, with harvest ongoing, while development conditions in southern Brazil are comparatively good. Brazil’s second crop is the largest of the three and the source of most of their exports. CONAB’s updated outlook for Brazil is scheduled for Thursday. Weekly U.S. export inspections were below the prior week and this time last year, with Japan and Mexico topping the list.

The wheat complex was lower on fund and technical selling, unable to follow through on the early gains. U.S. and world crop weather concerns seem to be on the back burner, with exports slower than expected. For winter wheat, 29% of the crop is in good to excellent condition, 2% more than a week ago, but 20% less than a year ago, with 33% of the crop headed, compared to 40% on average. For spring wheat, 27% of the crop is planted, compared to 47% typically this time of year, with 9% emerged, compared to the five-year average of 15%. Weather-wise, the trade is monitoring U.S. winter wheat development conditions and the spring wheat planting pace, along with hot temperatures in India and parts of Europe, in addition to the planting speed in Ukraine. The trade is also monitoring the early planting paces in Argentina and Australia. With less than a month left in the marketing year, U.S. wheat export inspections were below a week ago and a year ago, primarily to Indonesia and Japan. The USDA’s updated supply, demand, and production report is out Thursday. Egypt’s government says it plans to boost domestic production in an effort to meet 65% of its consumption needs, compared to the current 45%.