Market News

Soybeans, wheat shoot higher, corn up

Soybeans were sharply higher on commercial and technical buying. Contracts are heavily oversold and even if exports have faltered, domestic demand is strong. Near-term weather is mostly favorable ahead of what is expected to be a hotter pattern later this month into August, a critical time for development. The USDA’s next set of supply, demand, and production numbers is out July 12^th. Soybean meal and oil were higher on commercial and technical buying, with bean oil picking up additional support from the strength in crude oil. The broader market was generally neutral to bullish during Thursday’s session, but inflationary concerns remain a factor. There have still been no deliveries against July soybean, meal, and oil contracts. CONAB says soybean production was 124.048 million tons, slightly below the June estimate. Brazilian grain group ANEC projects July soybean exports at 6.536 million tons, compared to 7.969 million for July 2021.

Corn was higher on commercial and technical buying. Corn is also watching development conditions, with rain headed for some of the drier parts of the region ahead of an anticipated shift to a hotter, drier pattern. CONAB has Brazil’s second corn crop at 88.448 million tons, up 0.5% more than a month ago, with total production at 115.663 million tons. ANEC sees Brazil’s corn exports for July at 5.38 million tons, compared to 3.04 million in July 2021. The Buenos Aires Grain Exchange says 54% of Argentina’s corn crop is harvested, with 15% of the crop in good to excellent shape. Ethanol margins and the cash basis continue to be positives. The U.S. Energy Information Administration says ethanol production last week averaged 1.044 million barrels a day, the third week in a row with a decline, down 7,000 on the week and 23,000 on the year, with stocks at a four-week high of 23.49 million barrels, an increase of 744,000 from the previous week and 2.341 million from a year ago. The Renewable Fuels Association says May ethanol exports were 147.1 million gallons, a drop of 21% from the four-year high hit in April, with DDGS exports at four-month high at 966,108 tons, a rise of 19% on the month.

The wheat complex was sharply higher on commercial and technical buying. Wheat is very oversold after the recent drop and Paris milling wheat was higher ahead of the U.S. session. U.S. wheat prices are competitive, but demand has been limited by freight rates and the dollar. That’s keeping the fundamental outlook neutral to bearish and has prevented U.S. wheat from picking up some of the export slack after the crop damage in India and Russia’s invasion of Ukraine. The USDA’s weekly sales numbers are out Friday morning, delayed a day by July 4^th. Egypt’s government says it bought 63,000 tons of wheat from Germany. Egypt is the world’s bigger buyer with wheat, usually relying on supplies from the Black Sea region. There have been more discussions about Russia opening up an export corridor for Ukraine, moderated by Turkey, but any progress remains highly unlikely.