Market News

Soybeans, corn, wheat jump after USDA numbers

Soybeans were sharply higher on commercial and technical buying. The USDA says planted area was 87.6 million acres, up 5% on the year, but lower than what was expected ahead of the report. This will likely change between now and the end of harvest, with nearly 10 million acres still unplanted at the time the report survey was finished and it doesn’t factor in any recent potential losses. Quarterly stocks of 767 million bushels were down 44% and also lower than expected. In other words, the supply will remain historically tight through at least the end of next marketing year, which doesn’t wrap up for about 14 months. There’s been more talk, but no confirmation, of China buying U.S. beans. Soybean meal was sharply higher on the strength in beans and corn, while soybean oil was up, relatively modestly, following the lead of the rest of the soy complex. Argentina, the world’s biggest exporter of soybean products, is offering a one-year contract to dredge the Parana River, a vital artery for transportation to ports.

Corn was sharply higher on commercial and technical buying, including limit up gains in the September 2021 through May 2022 contracts. Corn planted area was 92.7 million acres, 2% above a year ago, but short of analysts’ estimates going into the numbers. Quarterly stocks were below the average pre-report guess at 4.1 billion bushels. Corn will also continue to look at an historically tight supply, with strong anticipated demand, through not only the 2020/21 marketing year, but also 2021/22. Weather will continue to be watched closely as the calendar turns to July, with concerns about flooding in some areas and drought or near drought conditions in others. Ethanol futures were steady to lower. The U.S. Energy Information Administration says ethanol production averaged 1.058 million barrels a day, up 10,000 on the week and 158,000 on the year, while stocks of 21.572 million barrels were the largest since mid-March, gaining 452,000 from the previous week and 1.408 million from this time last year. China says it will auction 155,000 tons of U.S. and Ukrainian corn from state reserves Friday. The offering is reportedly 123,977 tons from the U.S. and 31,539 tons from Ukraine. There was another hard freeze Tuesday into Wednesday in Brazil, further damaging their second crop.

The wheat complex was sharply higher on commercial and technical buying. At the end of the fourth quarter of the 2020/21 marketing year, wheat stocks fell 18% on the year with a big jump in the indicated disappearance. Spring wheat planted area was down 5% on the year, partially due to weather issues in the northern and northwestern Plains cutting acreage from the March planting intentions report. The rate of abandonment for spring wheat will be watched closely and production has likely been hampered by weather in the spring wheat region. The trade is also watching global development conditions, including dry conditions in spring wheat growing areas of Russia and Canada. The USDA’s next set of supply, demand, and production numbers is out July 12^th. DTN says South Korea bought 77,000 tons of U.S. wheat, while Tunisia purchased 100,000 tons of milling wheat from an unknown origin. The USDA’s weekly export sales numbers are out Thursday morning at 8:30 Eastern/7:30 Central.