Market News

Lower crop ratings support soybeans, corn

Soybeans were higher on commercial and technical buying. The USDA’s national good to excellent rating was down 2% on the week, because of dry conditions in parts of the Plains and Midwest, with an increase in the poor to very poor category. Nationally, development is ahead of normal, but there is still likely a lot of time left until widespread harvest activity gets underway. Domestic demand is solid, but exports continue to be a big concern because South America and tariffs. Early indications are freight and transportation issues might limit new crop bean acreage in Brazil. Soybean meal was mostly lower and bean oil was higher on the adjustment of product spreads.

Corn was higher on short covering and technical buying. The USDA’s national good to excellent rating declined 3%, more than expected, because of drought or near drought conditions in parts of the Midwest and Plains. Development remains faster than average in most key growing areas, potentially pushing this year’s crop to an early harvest. Corn is also continuing to monitor trade developments, including a new deal between the European Union and Japan, which doesn’t directly involve grains and oilseeds, but is expected to remove trade barriers on several products. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was higher on short covering and technical buying. The U.S. spring crop is in great shape overall at 80% good to excellent and the winter harvest is nearly 75% complete. The trade’s also keeping an eye on conditions in Europe and the Black Sea region. French milling wheat futures were up sharply ahead of the U.S. session, aiding the early gains. Globally, the fundamental outlook remains bearish, with the USDA projecting a high stocks to usage ratio, but the outlook is less bearish when China is taken out of the equation. Japan is tendering for 57,914 tons of U.S. food wheat.