Soybeans up on weather concerns, export sales
Soybeans were higher on commercial and technical buying. Most forecasts have more rain and cooler temperatures this week in many areas, but parts of the region will stay dry. The USDA says 60% of U.S. soybeans are in good to excellent condition, down 2% on the week and 10% on the year, with 97% of the crop planted, compared to the five-year average of 94%, 91% emerged, compared to 85% on average, and 5% blooming, matching the normal pace. China and unknown destinations bought 336,000 and 120,000 tons, respectively, of new crop U.S. beans, for delivery after September 1st. That is the first announced soybean sale since May 19th and the first reported purchase by China since April 23rd. That’s still short of the rumored amount purchased by China recently, but there could be more sales announced this week. Export inspections were up on the week, down on the year, and continue to show the dominance of Brazil on the export market, but 2020/21 remains well ahead of 2019/20. The top destinations were Indonesia and Japan. Soybean meal was modestly lower, unable to follow through on periodic gains, and bean oil was sharply higher, which spilled over into beans.
Corn was mixed. Corn is also watching the weather, including a chance for a return to hot, dry conditions across the region later this month. High winds this past weekend might have damaged crops in some areas, which won’t fully show up until next week’s crop report. As of Sunday, 65% of U.S. corn is rated good to excellent, 3% less than last week and 7% under last year. The trade is also waiting to see what the USDA has for final 2021 acreage numbers at the end of the month, along with quarterly grain stocks. Ethanol futures were unchanged. Weekly corn export inspections down on the week, up on the year, with China and Mexico leading the list, and with about two and a half months left, this marketing year is ahead of last marketing year by a wide margin. The uncertainties about Brazil’s second crop are helping U.S. sales, but there’s competition from Ukraine and China’s domestic prices have moved lower, limiting some of their need to import.
The wheat complex was mixed. Winter wheat harvest activity is ongoing but with delays in some areas due to rain. For winter wheat, 49% of the crop is called good to excellent, 1% higher than a week ago, but 3% lower than a year ago, with 96% of the crop headed, in-line with the usual rate, and 17% harvested, compared to 26% on average. While parts of the spring wheat region did get rain recently, longer-term forecasts are generally dry. For spring wheat, 27% of the crop is in good to excellent shape, a drop of 10% from the previous week and 48% under this time last year, with 27% of the crop headed, compared to 18% normally in mid-to-late June. Parts of Russia’s spring wheat region also need rain, but aside from that, global crop conditions mostly look good. The USDA’s next set of world production estimates is out on the supply and demand report July 12th. Just over two weeks into the 2021/22 marketing year, wheat export inspections are moving out slower than last marketing year. The Philippines and Mexico led the list of weekly recipients.