Market News

Soybeans, corn mostly lower, watching weather

Soybeans were mixed, mostly lower, adjusting spreads. While there is more rain in the near-term forecast for some areas, longer-term outlooks for the region are less certain as the crop enters key phases of development. August is usually the critical month for beans, but timely rainfall heading into July would still be beneficial. China bought 330,000 tons of new crop U.S. beans, their second purchase this week for a total of 666,000 tons and just the second announced soybean sale to China since late April. The new marketing year for soybeans starts September 1^st. Brazil continues to hold most of the export market share and will for at least the next couple of months, or until their exportable supply is exhausted. Soybean meal was sharply lower and bean oil was solidly higher on product spread trade linked to cash basis trends.

Corn was mixed, mostly lower, on spread adjustments. Corn is also watching the weather, with rain later this week possibly missing some of the drier parts of the northern Plains and limiting yield potential. The USDA’s planted area totals and quarterly grain stocks numbers are out on the 30^th. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 1.048 million barrels a day, up 23,000 on the week and 155,000 on the year, while stocks hit a 13-week high at 21.12 million barrels, which was an increase of 518,000 from the previous week and 86,000 from this time last year. The Renewable Fuels Association says the first ethanol imports of the year hit the West Coast last week, averaging 22,000 barrels a day. The trade is also monitoring crop conditions and harvest activity in Brazil.

The wheat complex was higher on fund and technical buying. Minneapolis took the lead, with July and September closing above $8, expecting further deterioration in the spring wheat crop due to conditions in the northern and northwestern U.S. Plains. Winter wheat harvest activity will likely be delayed in many areas by rain later this week, helping support Chicago and Kansas City. Globally, conditions generally look good, but some of Russia’s spring wheat region needs rain and the Canadian Prairies could see a drier pattern over the next week. The USDA’s next set of global production estimates is out July 12th. DTN says Ethiopia is tendering for 400,000 tons of optional origin milling wheat and Taiwan is in the market for 55,000 tons of U.S. milling wheat, while Jordan canceled a tender for 120,000 tons of milling wheat.