Market News

Soybeans up, corn mixed, wheat down ahead of USDA reports

Soybeans were higher on commercial and technical buying but did settle closer to the day’s lows than the highs. Many near-term forecasts have hot, dry weather, potentially stressing the crop. Some longer-term outlooks have that continuing into August, a key month for soybean development. The USDA says 62% of the crop is in good to excellent condition, down 1% on the week, with 32% blooming, compared to the five-year average of 38%, and 6% at the pod setting stage, compared to 9% on average. The trade was getting ready for the USDA’s updated supply, demand, and production numbers. Ahead of the report, analysts see production down from the June report because of the smaller planted area reported on June 30^th, along with slightly higher domestic old crop stocks and lower new crop stocks. U.S. soybean export inspections were down on the week, up on the year, mainly to China and Germany. Brazilian beans continue to hold a price advantage over U.S. supplies. Soybean meal was mixed on bull spreading, while bean oil was up on commercial buying and the higher move in palm oil.

Corn was mixed, with deferred contracts drifting down late in the session. Corn was also getting ready for those supply, demand, and production numbers while watching the weather. Most of the crop is either close to or entering the key pollination phase. As of Sunday, 64% of U.S. corn is called good to excellent, unchanged, with 15% silking, compared to 25% normally in early-to-mid July, and 2% at the dough making stage, compared to 3% on average. For Tuesday’s USDA reports, analysts see an increase in the 2022 production guess because of the higher-than-expected planted area, in addition to increased U.S. old and new crop ending stocks projections. Weekly export inspections were above last week and below last year, primarily to China and Mexico. There’s been more talk, but no confirmation of new demand from China in U.S. part. That’s partially due to Brazilian supplies hitting the market, with AgRural reporting 40% of that nation’s critical crop has been harvested.

The wheat complex was lower on profit taking and technical selling, unable to follow through on the overnight gains, with pressure from the higher move in the dollar. U.S. wheat prices are competitive, but export demand continues to be very slow, partially due to the dollar and freight costs. The winter wheat harvest is ongoing and spring wheat could see another improvement in the crop rating. For winter wheat, 63% of the crop is harvested, compared to 61% typically this time of year. For spring wheat, 70% of the crop is reported as good to excellent, up 4%, and 44% has headed, compared to the five-year average of 77%. Ahead of Tuesday’s supply and demand report, analysts, on average, anticipate modest month-to-month changes in domestic and international ending stocks numbers. U.S. export inspections were higher than a week ago and lower than a year ago, with Mexico and South Korea topping the weekly list. The ongoing uncertainties about Ukraine’s production and exports remain in the background. Russia is destroying fields in Ukraine and selling stolen Ukrainian grain as the already dim prospect of Russia opening an export corridor in the Black Sea for Ukraine grows darker.