Market News

Soybeans, corn, wheat give back some gains

Soybeans were lower on profit taking and technical selling, ending the session towards the middle of the day’s range. The near-term weather outlook has shifted, calling for a more moderate pattern in some areas next week. Still, forecasts can change quickly and August is the critical month for beans. Soybean meal was mostly lower on bull spreading. Bean oil was down on talk Indonesia will push back raising its palm oil biodiesel mandate from 30% to 35%, which was scheduled to start this week. Indonesia recently softened an export ban as the domestic palm oil supply has risen at a faster than expected rate following higher than anticipated production levels. Malaysia says it will keep its palm oil export tax at 8%. The global vegetable oils trade has been greatly impacted by the near-total absence of Ukraine, the world’s largest exporter of sunflower oil, following Russia’s invasion.

Corn was lower on profit taking and technical selling, with September and December closing below $6. Corn is also watching the weather, with the USDA’s national good to excellent rating holding steady over the past week after several days of mixed conditions across the region. Dry weather is also an issue in parts of Europe. The USDA’s first real yield estimate of the growing season is out August 12^th in the monthly supply and demand report. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Corn is monitoring the export situation in the Black Sea region. The USDA’s attaché in South Africa estimates 2022/23 corn production at 15.6 million tons, compared to the official guess of 17.3 million tons and the office’s 2021/22 total of 15.345 million tons. Exports are projected at 2.5 million tons, well below that official estimate of 3.7 million tons, but up from the anticipated 2021/22 FAS total of 2.2 million.

The wheat complex was weak to lower on profit taking and technical selling. Parts of the Northern U.S. Plains and Canada are expected to see near-term rain, benefitting the spring wheat crop, while the winter wheat harvest is ongoing and close to wrapping up in some key growing areas. The trade is waiting for new developments out of the recent negotiations on Ukraine’s exports also involving Russia, Turkey, and the United Nations. Reports have the European Union willing to dial back some of the banking sanctions on Russia to aid global movement of food and fertilizers. Moscow’s demands for a relaxation of the sanctions levied after the invasion of Ukraine have been a sticking point in negotiations, along with Russia’s continued attacks on Ukraine and the credible claims Russia is selling stolen Ukrainian grain. Egypt has canceled its weekly tender after U.S. soft red winter was the cheapest offer. Ukraine’s Ag Ministry says total grain exports for June were up 22% from May, but down 43% from June 2021.