Soybeans, corn recover some losses, still down on week
Soybeans were higher on short covering and technical buying but finished the week with strong losses. Contracts are oversold and while recent rain has helped, some areas remain locked in drought with the next set of crop progress and condition numbers out Monday afternoon. Brazil still has a near-term price advantage, but that has narrowed recently, reflected by the big uptick in new crop sales of U.S. beans. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The USDA’s attaché for Indonesia estimates 2023/24 palm oil production at 46 million tons, compared to the official guess of 47 million and the 2022/23 total of 44.7 million, but does note about 40% of Indonesia’s palm oil growing territory saw below normal rainfall during June due to El Nino. Exports next marketing year are seen at 28 million tons, compared to 27.6 million for the current marketing year. The USDA’s next set of supply and demand estimates is out August 11th.
Corn was higher on short covering and technical buying, stilling ending the week with a big decline following recent rainfall. The U.S. corn crop is close to being made and while that rain in the Midwest and Plains might not boost yields all that much, it’s likely stabilized conditions in parts of the region. A drone strike by Ukraine hit a major Russian port, which followed Russian attacks on Ukrainian ports and infrastructure. That port has reportedly resumed operations following repairs, but the continuing war remains a background factor in the markets. Ukraine, along with Brazil, has been a big source of corn recently for China, which has cut into U.S. market share. Brazil’s second corn crop harvest is ongoing with the updated outlook for CONAB scheduled for Thursday, August 10th.
The wheat complex was mixed, with the most active months at the three U.S. pits all seeing a big week-to-week drop. Wheat is monitoring the situation in the Black Sea region and the impact on exports. Slower shipments from Russia are possible and Ukraine’s export movement out of the major shipping source has already been curtailed by the ongoing war. Humanitarian concerns are also an issue. There have been more rumors, but no confirmation, of India buying wheat from Russia. Heavy rain is impacting quality and harvest activity in portions of Europe, while parts of the U.S. spring wheat region remain dry. Still, portions of the northern U.S. Plains and Canada could see a wetter pattern in the near future. While it’d be too late to help part of the crop, it could stabilize yields for some of the later planted spring wheat.