Market News

Soybeans, corn, wheat see solid gains

Soybeans were sharply higher on commercial and technical buying. Most forecasts have more hot, dry weather into at least early August for some key growing areas, potentially limiting yield. The USDA says 61% of U.S. soybeans are in good to excellent shape, down 1%, with 48% of the crop blooming, compared to the five-year average of 55%, and 14% at the pod setting stage, compared to 19% on average. There was also spillover support from palm oil, which was up ahead of the U.S. session, and a sharply higher move in crude oil. Those factors also floated soybean oil, while bean meal was up on the general strength in the soy complex. That spike in palm oil was tied to Indonesia temporarily lifting its export tax. In Ukraine, reports say just 15% to 20% of Ukraine’s oil extraction facilities in operation, slashing the available amount of vegetable oils available to the global market. Ukraine was the leading exporter of sunflower oil prior to Russia’s invasion.  U.S. export inspections were up on the week and the year, with China and Japan leading the way.

Corn was modestly higher on commercial and technical buying. Corn is also watching the weather, with most of the crop entering or already in the pollination phase, and more dry weather on tap for western growing areas. As of Sunday, 64% of U.S. corn is rated good to excellent, unchanged, while 37% is silking, compared to the normal rate of 48%, and 6% has dented, compared to 7% on average. There are also concerns about hot, dry weather impacting crops in parts of Europe. The USDA’s next set of supply, demand, and production estimates is out August 12^th, which will include an updated U.S. yield projection. Ethanol demand is solid, but last week’s production did fall short of what’s needed to meet USDA projections. U.S. export inspections were above a week ago, but slightly below a year ago, mainly to China and Mexico. As with many other commodities, corn is also waiting to see if a deal covering the resumption of export trade can be reached between Russia and Ukraine.

The wheat complex was sharply higher on commercial and technical buying. The trade is waiting for some reported progress in the recent export talks between Russia, Turkey, and Ukraine. Those talks are complicated by several factors, including Russia’s demand for the resumption of Ukrainian trade through the Black Sea, the continued attacks by Russia on Ukraine, and the extremely credible claims Russia is selling stolen Ukrainian grain. Export demand has been slow, but U.S. wheat is competitively priced, especially soft red winter. There’s some talk the U.S. could get at least part of this week’s tender by Egypt, which has traditionally been a big buyer of Black Sea region wheat. For winter wheat, 70% of the crop has been harvested, compared to 71% typically in mid-July. For spring wheat, 71% of the crop is called good to excellent, up 1%, and 68% has headed, compared to 90% on average. Some near-term rain is the forecast for parts of the northern U.S. Plains and Canada. U.S. export inspections were below last week and last year, with Yemen and Nigeria topping the list.