Market News

Wheat, corn end session in positive territory

Soybeans were narrowly mixed after an up and down session and the recent move to multi-year lows. The trade continues to monitor any new developments in the trade tensions with China ahead of planned tariffs by Beijing and retaliatory action by the U.S. U.S. crop conditions are generally good, but recent rain has missed some very dry areas. Timely rainfall would be beneficial during early stages of development. U.S. export demand continues to be slow, but movement delays persist in Brazil because of labor issues and, technically, contracts are oversold after the recent move to multi-year lows. According to wire reports, the Supreme Court of Brazil was unable to reach consensus on the contentious minimum freight issue and Brazil’s National Agriculture Confederation says exports of 6.8 million tons of beans and bean meal have been delayed by the impasse. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was fractionally higher on short covering and technical buying, seeing a modest bounce off the recent lows. Corn is also watching trade tensions, not only with China, but with potential European Union tariffs on U.S. goods, including corn, scheduled to go into effect Friday. The U.S. corn crop is in historically good shape, for now, but it’s mid-to-late June, not mid-to-late August, so there is still a lot of time left in the growing season for many areas. Ethanol futures were firm. The U.S. Energy Information Administration says production last week was the highest since mid-February, averaging 1.064 million barrels a day, while stocks declined 527,000 barrels.

The wheat complex was higher on commercial and technical buying, in addition to the lower U.S. Dollar Index, with Chicago taking the lead. Wheat’s watching early harvest activity and weather in the Black Sea region, along with forecasts for dry conditions in parts of Australia. U.S. spring wheat is in good condition overall and anecdotal winter wheat yields from Kansas have been low, largely as expected, with the potential for rain related harvest delays in parts of the Midwest and Plains. Egypt bought 240,000 tons of milling wheat from Romania. Bangladesh is tendering for 50,000 tons of wheat. Ukraine’s Ag Ministry doesn’t expect a big drop in production because of drought in some key growing areas, differing from several private firms in that nation.