Weather forecast pushes soybeans, corn lower
Soybeans were sharply lower on speculative and technical selling but closed towards the middle of the day’s range after the initial drop. Most near-term forecasts have a cooler, wetter weather pattern in much of the region, potentially boosting yield prospects. The USDA says 58% of U.S. soybeans are in good to excellent shape, down 1% on the week, with 93% blooming, matching the five-year average, and 74% at the pod setting stage, compared to 77% on average. There are also concerns about slower economic growth in China spilling over into the rest of the world. China was the top destination for U.S. export inspections last week, followed by Mexico, but the overall 2021/22 pace remains behind 2020/21. Soybean meal and oil were down on the fundamental implications of a larger U.S. soybean crop. The NOPA says member firms crushed 170.220 million bushels of soybeans during July, slightly below expectations, but up sharply on the year.
Corn was lower on speculative and technical selling, while still managing to finish above the session lows. Corn is watching the weather, with much needed rain early this week in parts of the Midwest and Plains, likely helping to limit yield loss in some of the driest parts of the region. As of Sunday, 57% of U.S. corn is called good to excellent, 1% lower, with 94% silking, compared to 97% on average, 62% at the dough making stage, compared to the usual rate of 65%, and 16% dented, compared to 20% on average. The USDA’s first field-based yield estimate of the season is out September 12th. Ethanol margins have tightened, but overall domestic demand remains solid, for now. On the export side of things, with the end of the current marketing year in sight, inspections last week were just over a half a million tons, with the overall pace behind last marketing year. The main destinations were China and Mexico. The new marketing year for corn and soybeans starts September 1st.
The wheat complex was lower on fund and technical selling, ending the day just below the session’s highs. There is rain in parts of the U.S. Plains ahead of new winter wheat crop planting and the dollar index was higher, reducing export competitiveness. For winter wheat, 90% of the winter wheat crop is harvested, compared to 94% on average. For spring wheat, 74% of the crop is in good to excellent condition, unchanged, with 16% harvested, compared to 35% normally in mid-August. Export demand for U.S. wheat is slow, influenced largely by the dollar, with a lot of uncertainties about Ukraine. Ukraine hasn’t shipped much, if any, wheat under the agreement with Russia, and there are questions about the winter crop harvest, storage for that grain, and how many acres were been planted this spring and summer. Russian wheat prices have been trending lower as their record expected crop moves into storage, but there are some reports of quality issues. The USDA did raise its production and export projections for Russia last week, while cutting outlooks for some other major exporters, while expecting global supplies to be their tightest in years. U.S. export inspections last week were below the previous week and last year, primarily to Mexico and the Philippines.