Market News

Soybeans, corn square up ahead of Friday’s USDA numbers

Soybeans were steady to modestly higher on short covering and technical buying. Contracts are oversold, but the trade is wary ahead of China’s tariff on U.S. beans going into effect next month. U.S. crop conditions look good overall, but there are some areas of concern heading into July. Quarterly soybean stocks are expected to be up on the year Friday and acreage will probably be higher than what the USDA was projecting in late March. Soybean meal was steady to lower on spread trade and demand uncertainties, while bean oil was up on technical buying and the strength in crude oil. The first notice day for July contracts is Friday. Allendale says a firm in Brazil expects increased planted area in 2018/19 and another record crop.

Corn was narrowly mixed, mostly steady. Corn remains concerned about trade issues, primarily with the European Union, Canada, and Mexico, along with the potential for a big crop. The trade’s also monitoring U.S. crop weather heading into more key development phases. The USDA’s 2018 acreage totals and quarterly stocks are out Friday at Noon Eastern/11 Central. Stocks could be at or near a June 1st record and acreage is expected to be above the USDA’s March projection. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 1.072 million barrels a day, up 8,000 on the week, while stocks were 21.674 million barrels, an increase of 27,000. Feed demand, with expanding livestock populations is also generally seen as a positive.

The wheat complex was mostly higher on short covering and technical buying. Wheat is also oversold and there was new commercial interest after the recent move to new multi-month lows, but the fundamentals remain bearish, limiting the upside for Chicago and Kansas City. Minneapolis was down on the generally good condition of the spring crop. Many forecasts do have at least some near-term precipitation in dry parts of the northwestern U.S. Plains and Canadian Prairies. Sections of southern Russia remain dry and parts of Australia could use more rainfall, but if those fail to materialize, that would likely only lead to modest global adjustments in the next set of supply, demand, and production numbers out July 12th. According to Egypt’s government, the domestic wheat procurement was 3.15 million tons, less than what Cairo was seeking, and down on the year. Egypt is the world’s leading importer of wheat, supporting a subsidized bread program. New crop numbers from Statistics Canada are out Friday.