Soybeans, corn wilt on higher USDA crop ratings
Soybeans were lower on commercial and technical selling, along with a generally bearish tone in the broader market. The USDA’s national crop condition rating improved by 3% to 72% good to excellent and development is ahead of average. Most near-term weather forecasts look non-threatening, but some areas do need rain, likely lowering yield potential to some degree. Generally cooler temperatures could mitigate some of that damage. No new export sales were announced Tuesday, breaking a streak of ten business days, even as U.S. prices continue to hold a discount to major export competitors. Most of those sales were new crop U.S. beans to either China or unknown destinations. Soybean meal and oil followed beans lower. The trade is also monitoring conditions in Argentina and Brazil ahead of new crop planting. For Brazil, early indications are for increased planting area as it competes with the U.S. for business from China.
Corn was modestly lower on commercial and technical selling. Corn is also watching the weather after a 3% week to week increase in the national good to excellent rating, also now at 72% good to excellent. Production won’t meet the lofty goals set by the USDA’s prospective planting report in March but could still top the 15-billion-bushel mark. Demand, especially for export and fuel use, remains slow, with new supply, demand, and production numbers out August 12th and the new marketing year for corn gets underway September 1st. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol supply and production numbers are out Wednesday. A wire survey shows analysts expect a significantly larger corn crop in South Africa thanks to better weather boosting yields.
The wheat complex was lower on commercial and technical selling, in addition to a modestly higher move in the dollar. Chicago, Kansas City, and Minneapolis are all watching harvest activity. The winter wheat harvest had a solid week to week advance, but is slightly slower than average, and the spring wheat harvest is just getting underway. The global supply fundamentals continue to be bearish and rumored demand from China hasn’t surfaced, at least not in the USDA’s daily reporting. Some demand could be reflected in this week’s export sales update. France’s Agritel pegs 2020 soft wheat production at 29.2 million tons, down 26% on the year and the smallest crop in decades. IKAR estimates Russian production at 78 million tons, up 1.5 million from the previous projection. Egypt reportedly bought 470,000 tons of wheat, 360,000 tons from Russia and 110,000 tons from Ukraine.