Soybeans, corn, wheat higher ahead of USDA numbers
Soybeans were higher on fund and technical buying. Beans were getting ready for what could be a bullish set of USDA numbers Wednesday. Following the June 30th, quarterly stocks and planted area, the trade anticipates a smaller production guess along with tighter carryout projections, the big question is how much of a cut will be made in this round of numbers. The trade is anticipating modest changes, if any, to old and new crop ending stocks and production numbers for Argentina and Brazil. CONAB’s updated outlook for Brazil’s crops are out on Thursday the 13th. The national good to excellent rating on beans did improve but remains near historically low levels overall and includes poor ratings in some of the top states. Soybean meal futures were higher and bean oil was lower, unwinding product spreads.
Corn was higher on fund and technical buying. The national good to excellent rating for corn moved higher, but some of the leading production states are in the worst shape. Forecasts for this week are mixed, with chances of rain in some of the drier areas, but coverage and totals are in question and there is the possibility of severe storm damage. The USDA isn’t known for making big changes in the July WASDE report, but there is some sentiment the department could lower its yield estimate because of drought. Analysts also expect tighter domestic ending stocks numbers and will be watching for any updates to production numbers for Brazil. The harvest of Brazil’s expected record second crop is ongoing. The U.S. Energy Information Administration’s weekly ethanol production and stocks report is also out Wednesday.
The wheat complex was higher on fund and technical buying. The USDA’s spring wheat rating was down with limited rain in the forecast for the northern Plains and the Canadian Prairies. The winter wheat harvest is slower than average following recent rain in the central Plains. Regardless of weather issues, any significant upside for wheat will continue to be limited by slow demand as Russia continues to control the market. Moscow continues to signal it’s not likely to agree to an extension of the Black Sea Grain Initiative and has recently attacked one of the Ukrainian ports covered under the pact. Ahead of Wednesday’s supply and demand numbers, analysts expect a slightly higher winter wheat production estimate, while U.S. ending stocks could be down for old crop and up for new crop. Globally, analysts expect minimal adjustments in the carryout numbers. France’s farm ministry estimates soft wheat production at 35 million tons, compared to 33.69 million in 2022 thanks to higher harvested area and a better average yield.