Market News

Soybeans follow through, corn closes higher

Soybeans were sharply higher on commercial and technical buying. Traders continued to buy back some of the recent losses, with help from meal and oil. Soybean meal was supported by solid demand expectations and crush margins, while bean oil picked up additional support from crude oil. The CME Group’s Malaysian palm oil futures were also higher. The first notice day for deliveries on CBOT July contracts is the 30^th. The USDA’s condition rating declined 3% and there are concerns about soil moisture in parts of the eastern Midwest. How many acres actually got planted this year is an uncertainty, with the USDA’s planted area totals and quarterly grain stocks report both out this Thursday. Weekly export sales numbers are also out Thursday. The trade is also keeping an eye on the potential relaxation of COVID restrictions in China, which would likely boost demand for oilseeds and products. Even if there hasn’t been much interest from China recently, 2021/22 and 2022/23 U.S. sales have been strong.

Corn was higher on commercial and technical buying. The corn condition rating was 3% lower, with only scattered rain in the near-term forecast, during key phases of development. Most outlooks for July and August have hotter temperatures and inconsistent precipitation. Still, there are a lot more unknowns than knowns at this point for corn and aside from acreage adjustments connected to the June 30^th numbers, the USDA probably won’t make any significant changes to the production estimate in the July 12^th update. The U.S. Energy Information Administration is scheduled to release two weeks’ worth of production and stocks numbers Wednesday. Last week’s report was delayed by technical issues. Harvest continues to Brazil’s second crop, with AgRural lowering their guess to 80.3 million tons, while raising total production to 113.8 million. CONAB’s next projection for Brazil is out July 7^th. The European grain group MARS sees Russia’s corn crop at 16.7 million tons, which would be 8% above a year ago. SovEcon expects Ukraine’s corn crop to be 28.1 million tons, 1.1 million more than the prior guess, but about a third of the 2021 total due to Russia’s invasion.

The wheat complex was mostly higher, with Chicago and Kansas City up and Minneapolis mixed. Contracts are oversold and Paris milling was higher ahead of the U.S. session. The winter wheat harvest is ahead of average thanks to weather in the central and southern Plains, while spring wheat is in better than a year ago condition. Spring wheat conditions in Canada are also better than a year ago. Planting in the northern U.S. Plains and Canadian Prairies had seen significant delays, but that precipitation and recent rainfall could boost yields, even if planted area ends up being lower than expected. Statistics Canada’s spring wheat planted area totals are out July 5^th. European crop group MARS estimates Russia’s wheat crop at 88.8 million tons, 66.6 million tons of winter wheat and 22.2 million tons of spring wheat. SovEcon pegs Ukraine’s wheat crop at 20.7 million tons, down 1.4 million from the prior projection and potentially 11.5 million below a year ago due to Russia’s invasion.