Market News

Wheat, soybeans, corn end week with good gains

Soybeans were sharply higher on fund and technical buying, padding the week-to-week gains. The trade was focusing on weather, with dry conditions in parts of the region expected to worsen over the next few days. The USDA’s first national crop condition rating for beans is expected to be out Monday afternoon. There was also spillover from a rally in bean oil, which pulled bean meal higher. Weekly export numbers were bearish, along seasonal lines, but the near-term supply remains very tight and if this year’s crop is hit by weather, the supply will remain tight next marketing year. There’s a likelihood producers planted more beans than what was projected at the end of March, with the USDA’s totals scheduled for the end of the month, along with quarterly grain stocks. The big buyer for old crop U.S. beans was Japan, while unknown destinations led the list for new crop. China did buy 10,000 tons of new crop U.S. beans, but continues to rely on Brazil, which will likely continue until at least August. The new marketing year for beans starts September 1^st.

Corn was sharply higher on fund and technical buying, also finishing the week sharply higher. Corn was also watching the weather, with a significant potential for crop stress in some key growing areas. The USDA’s first national corn rating of the season had 76% of the crop in good to excellent condition, but that could decline if the weather is as hot and dry as expected. Parts of Brazil will get some near-term rainfall, but other areas will continue to be hot and dry, further limiting second crop production potential. That’d also likely lead to even greater export demand for U.S. corn. CONAB’s new production estimate for Brazil is scheduled for June 10^th, the same day as the new USDA supply and demand estimates. Old crop corn exports were larger than expected, China was the second biggest buyer after Japan, while new crop sales were nearly 440,000 tons, led by unknown destinations. Ethanol futures were steady.

The wheat complex was sharply higher on fund and technical buying, with all three pits posting solid weekly gains. Minneapolis was in the lead on the weather outlooks for the spring wheat growing region, with July through March closing above $8 and September gaining nearly $.90 on the week. U.S. winter wheat conditions generally look better than spring wheat, but there are some areas of concern. According to U.S. Wheat Associates, there have been weather-related winter wheat harvest delays in Texas, but activity should pick up steam in Oklahoma, while ongoing drought in northern growing areas is impacting development. Parts of Russia need rain, but overall, global crop conditions generally look good. Ukraine’s ag minister estimates that nation’s wheat crop at 75 million tons, while Russia’s ag minister sees their crop at 81 million tons. The USDA’s next set of global production estimates is out June 10^th in the monthly supply and demand update. Old crop wheat exports during the week ending May 27^th were a net reduction, with new crop sales just shy of 400,000 tons. The 2021/22 marketing year for wheat started June 1^st.