Market News

Soybeans, corn buy back recent losses

Soybeans were higher on short covering and technical buying, recovering Wednesday’s losses and then a little bit more. More planting delaying rain is expected in some key U.S. growing areas over the next few days and extended forecasts show more wet weather in store for the Midwest. Unknown destinations bought 189,000 tons of U.S. beans Thursday morning, with 126,000 tons for 2018/19 and 63,000 for 2019/20, which starts September 1st. The USDA’s weekly export numbers were neutral for beans, bearish for soybean products. The soy complex continues to reflect the impact of South American production and China’s tariff on U.S. beans. Soybean meal and oil followed beans higher. The trade is waiting to see what happens next week at the G20 meeting in Japan. A new trade deal with China is unlikely at this summit, but President Trump has indicated he’s meeting with President Xi.

Corn was higher on short covering and technical buying, bouncing back from the recent losses, with July and December closing above key psychological levels. Corn is also watching the weather, expecting more planting delays and a smaller than originally projected crop, along with further signs of demand rationing. More imports are likely, especially in the southeastern U.S. and the crop is in worse shape than this time last year. The USDA’s updated acreage numbers and quarterly stocks data are out June 28^th, with new supply, demand, and production estimates out July 11^th. Mexico purchased 122,000 tons of U.S. corn, with 52,000 tons for old crop delivery and 70,000 tons for new crop. Weekly numbers were bearish, with a slow week for old and new crop sales. Ethanol futures were higher. Now that Mexico’s legislature has passed the USMCA, the onus falls on Canada and the U.S., with Prime Minister Trudeau meeting with President Trump in Washington D.C. 10% of Brazil’s second corn crop has been harvested.

The wheat complex was mixed, with Chicago and Kansas City up modestly and Minneapolis weak. Rain is expected to further delay winter wheat harvest activity in parts of the Midwest and Plains, ahead of an expected drier pattern next week. The weather has not only delayed harvest but has lowered protein content and put many producers on high alert for disease. Increased feed wheat demand is likely because of the issues impacting corn. Spring wheat is in good shape, with planting likely wrapping up soon. The trade is watching weather for Australia, Canada, Russia, and Ukraine. DTN says there are several open wheat tenders, some of which could go to the U.S., but Egypt 290,000 tons, 180,000 from Romania and 110,000 tons from Russia, with no U.S. offers. The recent jump in price has placed U.S. wheat prices above most competing origins. The USDA’s weekly numbers were bearish and while 2019/20 is ahead of 2018/19, it is very early in the current marketing year.