Market News

Weather pushes corn, soybeans, wheat lower

Soybeans were lower on fund and technical selling, with the most active months seeing double digit weekly losses. China bought another 132,000 tons of new crop U.S. beans Friday morning, but sales remain short of what’s needed to meet Phase One obligations. China also bought 132,000 tons of 2020/21 U.S. beans Thursday, Beijing’s first purchase in about a week. Brazil’s sales to China during May were 8.86 million tons, the highest for the month in two years, while U.S. sales last month were 491,697 tons, a year to year drop of 50%. That continued demand for Brazilian beans is despite a big U.S. discount, probably allowing to the uncertainty surrounding the U.S./China relationship. Both the U.S. and Brazil have said they cannot promise Beijing that shipments of beans and meat will be free of coronavirus. Stateside, development conditions generally look non-threatening and most analysts expect planted area to be above initial projections. Soybean meal and oil followed beans lower. Statistics Canada’s planted area estimates are out Monday, with analysts projecting soybean acreage at an average of 5.3 million acres with canola at 20.7 million, close to the April numbers.

Corn was modestly lower on fund and technical selling as contracts posted significant week to week declines. Corn was also watching development weather, expecting near-term rain in some areas along with generally seasonal temperatures. The USDA’s planted area totals are out on the 30th, along with quarterly stocks data. Ahead of the report, most analysts see a smaller planted area figure than what the USDA was expecting in March. Export demand for U.S. corn continues to be slow because of hefty competition and there are continued concerns about feed and fuel use as well. Ethanol futures were mixed. Unknown destinations bought 203,500 tons of U.S. sorghum, with 135,500 tons for 2019/20 and 68,000 tons for 2020/21. The current marketing year for sorghum, corn, and soybeans runs through the end of August. Statistics Canada Monday is expected to put corn planted are at 3.6 million acres, below the initial projection.

The wheat complex was lower on fund and technical selling, pulling the three U.S. pits to notable week to week losses. Winter wheat harvest activity is ongoing with a wide range of yield, quality, and test weights. Rain is in the forecast for some dry spring wheat growing areas of the northern U.S. Plains. Those factors pushed July Minneapolis and September Kansas City to new contract lows. The global supply outlook is bearish, with many sources projecting record world production. The USDA’s next set of supply and demand estimates is out July 10th. Losses in the broader market also generally put pressure on commodities. The European Commission estimates 2020/21 soft wheat production for the European Union at 117.2 million tons, compared to 121.5 million in May. Ukraine’s state weather group sees 2020 grain production at 72.4 million tons, compared to the 2019 record of 75 million, including 24.5 million tons of wheat and 39 million tons of corn. Japan bought 101,243 tons of food wheat from the U.S., Australia, and Canada. Monday, Statistics Canada is expected to report all wheat acreage of 25.2 million acres, a little bit below the April guess, with durum at 5.5 million, slightly more than originally anticipated.

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