Market News

Soybeans, corn continue weather rally

Soybeans were higher on speculative and technical buying, with the most active contracts gaining about $.40 on the week. Most forecasts had more planting delaying rain in parts of the Midwest and Plains. This year’s planted area and yield are big questions right now, with the next set of USDA estimates out July 11^th. China and unknown destinations both bought 130,000 tons of 2018/19 U.S. beans Friday, but China also canceled on a previous purchase of 136,000 tons of old crop. Chinese demand is also a big question mark for beans right now ahead of the G20 summit later this month in Japan. New crop U.S. sales are slow, there’s more talk of China cancelling previously purchased beans, African Swine Fever continues to limit demand, and Beijing reportedly bought a lot of beans from Brazil this past week. Soybean meal was higher and bean oil was lower on the adjustment of commercial spreads.

Corn was higher on speculative and technical buying, with July and December both closing above key technical points for the second session in a row. Corn was also watching the weather, with more rain expected in some key U.S. growing areas. This year’s yield could be better than what the USDA is currently anticipating, as there is still a long way to go for this year’s crop, but the most recent acreage guess was viewed as conservative and could fall further. Unknown destination also bought U.S. corn Friday morning, picking up 125,613 tons for 2019/20 delivery. The new marketing year for corn starts September 1^st. That said – the recent surge in price might curb export competitiveness. Ethanol futures were higher.

The wheat complex was mixed, mostly higher. The recent rally has priced U.S. wheat above most other origins and the fundamental outlook continues to be bearish, limiting gains. Still, some of those supply woes could be eased by increased feed wheat demand. More rain will further delay the winter wheat harvest in some areas and lower protein content, supporting Chicago and Kansas City and cementing strong weekly gains. Minneapolis was down on expectations for a quick end to spring wheat planting, along with beneficial rainfall in the northern U.S. Plains and Canadian Prairies, ensuring a modest week-to-week loss. The trade is also watching weather in Australia, Russia, and Ukraine. DTN says the Philippines bought 110,000 tons of feed wheat, likely Black Sea origin, and Taiwan is tendering for 83,200 tons of U.S. milling wheat. Strategie Grains projects European Union 2019/20 soft wheat exports at 22.1 million tons, down from May’s estimate, and about steady with 2018/19. The new E.U. marketing year starts in July.