Soybeans up, following soybean oil
Soybeans were higher on commercial and technical buying, padding the weekly gains. The big influence is the strength in soybean oil, which was supported by demand expectations ahead of the RFS update. The USDA raised old and new crop U.S. ending stocks, while lowering old crop production for Argentina and Brazil slightly. The Buenos Aires Grain Exchange says 94% of Argentina’s soybean harvest is complete, with yields down sharply on the year due to drought. There were no changes to the U.S. production outlook this month, with the next set of numbers out July 12th. Soybean meal was mixed on another round of bear spreading. Unknown destinations bought 197,000 tons of 2022/23 U.S. soybeans Friday morning, the second announced sale of U.S. during the week. A sustained improvement in export demand during the last quarter of 2022/23 is a question mark with Brazil controlling the market following a record crop.
Corn was modestly lower on fund and technical selling, pulling contracts to weekly losses. Significant portions of the Corn Belt are dry, but there is some rain in the forecast over the next week. That said – with planting nearly over for the season, some critical phases of development are on the horizon and the crop will need timely precipitation. The trade is keeping an eye on the developing El Nino system and the impact on this year’s crop. Old crop corn ending stocks were above a month ago on slow export demand, which pushed new crop stocks higher. There were no changes to the ethanol use estimate, despite the slower than a year ago pace of demand. The new marketing year on corn starts September 1st. Globally, the USDA lowered its guess for Argentina while raising the projection for Brazil. Brazil’s second crop harvest is underway with some concerns about possible damage from a frost/freeze event this month. CONAB’s updated outlook for Brazil is scheduled for June 13th.
The wheat complex was mixed, with Chicago up and Kansas City and Minneapolis down. New crop ending stocks were above a month ago with a modest upward revision for this year’s winter wheat crop. The soft red winter crop guess was down 1% from May, supporting Chicago, while the hard red winter projection was up 2%, pressuring Kansas City. That might be a sign that late seasonal rainfall in parts of the central and southern Plains provided some relief. Still, the winter wheat harvest is only just now getting underway. Minneapolis had a firm weekly finish on concerns about dry weather in parts of the northern U.S. Plains. That followed widespread planting delays due to wet, cool weather. There are a lot of questions about how many acres of spring wheat were actually planted this year. Some answers will be found in the 2023 planted area totals out on the 30th, along with quarterly grain stocks. For the week, Kansas City was down with Chicago and Minneapolis up. New crop world production was higher on increased expectations for Europe, Russia, Ukraine, and India. However, weather will likely have at least some impact on those numbers, and while production in Russia and Ukraine was up on the month, both crops should be smaller than last year. The Buenos Aires Grain Exchange says dry weather in parts of Argentina is delaying winter wheat planting.