Soybeans, corn, wheat gain some ground
Soybeans were sharply higher on commercial and technical buying. Crush margins have tightened, but remain in positive territory, and bean meal was up sharply. Soybean oil had some influence from palm oil futures, which closed lower ahead of the U.S. session. Weather this week generally looks mild, while forecasts have a return to hotter, drier conditions in many areas next week, a critical time period for soybeans. This past weekend’s rainfall was below initial projections in much of the region. The USDA’s first official yield estimate of the season will be in the supply, demand, and production update August 12th. That report might include an updated look at acreage after a resurvey in the northern Plains. The USDA says 59% of U.S. soybeans are in good to excellent condition, 2% lower than a week ago, with 64% of the crop blooming, compared to the five-year average of 69%, and 26% at the pod setting stage, compared to 34% on average. Soybean export inspections were down on the week, up on the year, mainly to Mexico and China. Commodities and the broader market are also waiting to see what develops at this week’s Federal Reserve meeting, which concludes Wednesday.
Corn was higher on commercial and technical buying. Weekend rainfall failed to meet expectations in parts of the Midwest and Plains, missing some of the drier portions of the region. More near-term precipitation is probable in parts of the region, not all, ahead of an expected turn to hotter and drier weather. As of Sunday, 61% of U.S. corn is in good to excellent shape, 3% less than last week, with 62% silking, compared to 70% normally in late July, and 13% is at the dough making stage, compared to 15% on average. Export demand for U.S. corn is slow, but ethanol demand is solid, with margins holding in positive territory. U.S. export inspections failed to break 725,000 tons, down sharply from both last week and last year, primarily to Mexico and China. With just over two months left in the marketing year, 2021/22 inspections trail 2020/21.
The wheat complex was higher on commercial and technical buying. After signing an export deal last week, Russia continued to attack Ukraine over the weekend, including port infrastructure at Odessa. Ukraine’s government says it will continue efforts to ship out of the Black Sea, but that’s largely contingent on Russia scaling back attacks. U.S. spring wheat is in generally good shape, with a major crop tour this week. For winter wheat, 77% of the crop is harvested, compared to the typical rate of 80%. For spring wheat, 68% of the crop is called good to excellent, a decrease of 3%, and 86% has headed, compared to 96% on average. U.S. export inspections were above a week ago, below a year ago, with Mexico and the Philippines leading the way. It’s still early in the marketing year, but 2022/23 continues to trail 2021/22.