Soybeans up as dollar pushes wheat lower
Soybeans were higher on short covering and technical buying. China bought 136,000 tons of 2022/23 U.S. beans, continuing to show solid demand despite economic concerns and political tensions with the U.S. Soybean export inspections were up on the week and the year, primarily to China and Mexico, with the 2022/23 pace faster, so far, than 2021/22. Late development and early harvest weather looks good in much of the Midwest and Plains. The USDA says 55% of U.S. beans are in good to excellent condition, down 1%, with 42% dropping leaves and 3% harvested, both behind the respective five-year averages. Soybean meal was higher and bean oil was lower on the adjustment of product spreads, with bean oil seeing additional pressure from a drop in palm oil. Farmer selling continues to pick up steam in Argentina, driven by a change to the exchange rate for that commodity. There are some reports of U.S. firms buying soybean oil from Argentina due to lower premiums because of that uptick in sales. Beans are also monitoring the early planting pace in Brazil.
Corn was closed modestly higher after an up and down day, supported by short covering and technical buying, along with the higher moves in beans and bean meal. The corn harvest is ongoing, with the USDA expected to report solid progress in this week’s update. As of Sunday, 52% of U.S. corn is called good to excellent, 1% lower, with 87% dented, 40% mature, and 7% harvested, all slower than average. Export demand for U.S. corn remains slow, with prices above supplies from Brazil and Ukraine. Export inspections last week were up from the previous week and last year, with the 2022/23 pace running ahead of 2021/22, but there is a long way to go in the current marketing year. The top destinations were Japan and China. Corn is also keeping an eye on planting conditions in Brazil, but the spotlight won’t really fall on that country until second crop corn planting starts, after the soybean harvest.
The wheat complex was lower on fund and technical selling. The dollar was mixed on the day, but remained near the recent highs, making U.S. goods more expensive on the export market, further reducing competition. Australia, Canada, and Russia are all expected to produce record or near record crops, offsetting some of the concerns about tighter supply projections for the current marketing year. Still, that tightness and the rise in prices will continue to be felt in the world’s most vulnerable populations and will likely exacerbate global food insecurity issues. IKAR has Russia’s crop at 99 million tons, up 2 million from the prior guess, with 47.5 million tons of that possible available for export. Ukraine’s Ag Ministry has their total 2022 grain crop at 50 to 52 million tons, a big drop from 2021 following Russia’s invasion in February. U.S. export inspections were above a week ago and a year ago, mainly to China and Japan, but just over a quarter into 2022/23, the pace trails 2021/22. Stateside, continued drought or near drought conditions continue to be a big issue in the southern and southwestern U.S. Plains. For U.S. winter wheat, 21% is planted, compared to the five-year average of 17%, and 2% has emerged, matching the normal pace. For spring wheat, 94% of the crop is harvested, in-line with the typical rate. The trade is also watching the spring wheat harvest get underway in Canada. Kazakhstan says it plans to export as much as 9.5 million tons of grain and flour this marketing year, with a wheat crop of 13.7 to 14 million tons.