Market News

Soybeans, corn fall, watching planting weather

Soybeans were sharply lower on fund and technical selling. U.S. planting is faster than average, with favorable weather in the near-term forecast for many areas. A number of key states are considerably ahead of their respective normal paces, but portions of the northern Plains are lagging due to wetter and cooler than ideal conditions. Broader market bearishness linked to concerns about U.S. and global economic growth was an additional factor. Brazil’s basis is moving higher as harvest draws to a finish, which could help U.S. exports. The new marketing year for soybeans, and corn, starts September 1^st. The USDA’s next round of supply and demand numbers is out June 9^th, with CONAB’s updated outlook for Brazil due June 13^th. The trade is keeping an eye on yield numbers in Argentina as well. Soybean meal and oil fell in concert with beans, with oil seeing additional pressure from the lower moves in crude oil and some global vegetable oils.

Corn was lower on fund and technical selling. 65% of corn is planted, but there is the possibility of an increase in prevent plant acres in some northern growing areas. Domestic cash basis levels are strong and farmer selling is slow, which provided limited support. The uncertainty over the Black Sea Grain Initiative also helped ease losses, at least to an extent. Ukraine’s Grain Association projects 2023/24 corn exports at 19 million tons, down 30% from 2022/23 because of a smaller harvest, with production and trade impacted by the war with Russia. France’s AgriMer says it expects a 7.6% decline in corn planted area because of last year’s drought and lower returns compared to other crops. Corn is also monitoring development weather for Brazil’s second crop and harvest activity in Argentina. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was mixed, with Chicago down, Kansas City nearby contracts weak, and Minneapolis modestly higher. The Black Sea Grain Initiative is unlikely to be extended, with no publicly scheduled meetings ahead of the expiration Thursday. It’s expected the expiration would limit Ukraine’s exports much more Russia’s. Still, any significant disruption to trade in the region would end up severely impacting some of the world’s poorest nations. Even with the recent slide in price, U.S. wheat is unable to find much traction on the global market. The 2023/24 marketing year for wheat starts June 1^st. The hard winter wheat crop is in very poor condition compared to soft red winter with a major crop tour getting underway in the Plains this week and spring wheat planting remains slow because of wet weather in the northern Plains. Conversely, dry weather is an issue in parts of Argentina, Canada, and Russia. France’s AgriMer expects a 1.6% increase in from 2022 to 2023 in soft wheat planted area.