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Soybeans, corn down on expected better weather

Soybeans were sharply lower on fund and technical selling but finishing above the session lows. Most medium-term weather outlooks have good rain coverage in much of the region, easing some of the anticipated stress from the current weather pattern in some key growing areas. That’s expected to start either late this week or early next week. The USDA says 62% of U.S. soybeans are rated good to excellent, down 5% on the week and 10% on the year, with 94% of the crop planted, compared to the five-year average of 88%, and 86% emerged, compared to 74% on average. Global vegetable oils have moved sharply lower recently and Brazil continues to dominate soybean exports. Soybean meal and oil were sharply lower Monday on the generally bearish tone in grains and oilseeds. Ahead of the session, palm oil and canola futures were lower. There’s also uncertainty about biofuels mandate policies under the Biden administration. Soybean export inspections were down on the week and the year, but the overall 2020/21 pace remains ahead of 2019/20. The top destinations were Mexico and Japan. NOPA member soybean crush numbers for May are out Tuesday.

Corn was sharply lower on fund and technical selling, closing within a few cents of the day’s lows. Corn is also watching U.S. crop development conditions, expecting a slight decline in the USDA’s crop rating ahead of the weekly numbers due to the recent hot, dry weather in many key growing areas. As of Sunday, 68% of U.S. corn is called good to excellent, 4% less than last week and 3% under last year, with 96% of the crop emerged, compared to 91% on average. Most forecasts have more dry weather in central Brazil, further impacting their second crop. The USDA lowered their production projection for Brazil last week, with the probability of further reductions in coming months. Aside from weather, the trade is getting ready for the USDA’s planted area and quarterly stocks numbers out on the 30th. Ethanol futures were unchanged. Corn and the ethanol industry also waiting to see if there are any changes to biofuels mandates under the Biden administration following reported lobbying by oil state Senators. Export inspections were up on the week and the year, the leading destinations were China and Japan, with the current marketing year well ahead of last marketing year. The new marketing year for corn, and beans, starts September 1st.

The wheat complex was lower on fund and technical selling, posting moderate losses relative to corn and beans. Hard red and soft red winter wheat conditions generally look good, especially in comparison to white wheat and spring wheat, and harvest is ongoing in many areas. For winter wheat, 48% of the crop is in good to excellent shape, 2% less than both a week ago and a year ago, with 92% of the crop headed, matching the usual pace, and 4% harvested, well behind the five-year average of 15%. The recent rain in North Dakota should help spring wheat to some extent, but the crop will need more. For spring wheat, 37% of the crop is in good to excellent condition, 1% lower than the week before and a drop of 44% from this time last year, Export inspections were down on the week and the year, the main destinations were the Philippines and Nigeria. Less than a month into the 2021/22 marketing year, the pace of inspections trails 2020/21. Global crop conditions generally look non-threatening but some of Russia’s spring wheat region will need timely precipitation to reach full production potential. New USDA supply, demand, and production numbers are out July 12th.

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