Soybeans give back gains, corn and wheat mixed
Soybeans were lower on profit taking and technical selling. The trade was expecting the USDA to report a solid week-to-week increase in planting, even after rain in parts of the region last week. The USDA says 35% of U.S. soybeans are planted, compared to the five-year average of 21%, with 9% emerged, compared to 4% on average. There’s more rain in the forecast during this week for parts of the region, while other areas could continue to see a drier pattern. In South America, Brazil’s record harvest is nearly over while the much smaller crop in Argentina appears to be factored in. The big issues for Brazil are the storage and transportation of that record crop. The USDA says U.S. export inspections were down on the week and the year, mainly to Indonesia and China, but 2022/23 is now slightly ahead of 2021/22 and remains on pace to meet or exceed USDA projections. The second half of the current marketing year starts June 1st. Soybean meal was mostly higher, adjusting spreads, and bean oil was down on profit taking.
Corn was steady to lower. Corn is watching planting conditions, including more cool, wet weather in the northern Plains over the next few days. As of Sunday, 49% of the crop is planted, compared to 42% on average, and 12% has emerged, compared to 11% normally in early May. Near-term development conditions for Brazil’s second crop are generally favorable. CONAB’s updated outlook for Brazil is scheduled for Thursday while the USDA’s next round of supply and demand projections is out Friday. Corn inspections were below last week and last year, Mexico and Japan topped the list, with the overall pace slower than what’s needed to meet USDA estimates. The USDA could lower its export projection in this upcoming WASDE report.
The wheat complex was mixed, mostly higher. Kansas City was up on the drought in the southern Plains, while Minneapolis was supported by the slow spring planting pace. For winter wheat, 29% of the crop is called good to excellent, up 1% on the week, and 38% has headed, compared to the usual rate of 35%. For spring wheat, 24% of the crop is planted and 5% has emerged, both much slower than normal. Globally, parts of Canada and Argentina are dry during planting, and there’s talk India will extend its export ban. Chicago was down, waiting to see what happens with the Black Sea Grain Initiative as Russia continues to wage war in Ukraine. Still, there’s some sentiment that any changes to export business out of the Black Sea would be minor. Russia continues to dominate the export market and some reports out of Ukraine are already calling the pact dead because of slower inspections by Russia. The deal is set to expire on the 18th. U.S. export inspections were under a week ago and a year ago, primarily to Mexico and Ethiopia. With the new marketing year getting underway June 1st, wheat inspections are on pace to meet USDA expectations for 2022/23.