Market News

Soybeans down, but still post slight weekly gain

Soybeans were lower on profit taking and technical selling, reversing course from Thursday, but still finishing modestly higher on the week. The trade was watching planting weather, expecting the USDA to report mixed progress on Monday, ahead of a more conducive weather pattern. The trade is also waiting to see what happens at the upcoming G20 summit. Significant progress is unlikely, but President Trump and China’s President Xi are expected to meet in Japan. China’s tariff on U.S. beans continues to slow demand and if acreage expectations come to fruition, even with a less than ideal yield, a big crop is likely, and supplies could climb to record levels. African Swine Fever continues to be a wildcard for Chinese soybean demand, but some stockpiling is being reported. The USDA’s next set of supply, demand, and production estimates is out July 11^th. Soybean meal and oil were lower on the same factors as soybeans.

Corn was lower on profit taking and technical selling, cementing a double-digit weekly loss in the most active months. Corn continues to watch late planting activity, while waiting for more signs of acreage adjustments. Demand rationing is ongoing because of significant cuts in production estimates, with the USDA’s quarterly grain stocks and acreage numbers out on the 28th. The acreage numbers should be disregarded quickly, because of the planting delays, and even if as-of-June 1^st old crop supplies are large, they could drop in the coming months. The recent rally has limited U.S. corn’s export competitiveness, with U.S. prices at a premium to South American supplies. Ethanol futures were lower.

The wheat complex was mostly lower on profit taking and technical selling, with the three major U.S. exchanges losing ground on the week. Most forecasts have drier weather for the end of June at least for some areas, which will help winter wheat harvest activity. Some damage has been done to protein content, probably leading to increased feed use, and there are disease concerns for hard and soft red winter. Spring wheat is in very good shape, with planting expected to wrap up soon in parts of the northern U.S. Plains and Canadian Prairies. The trade is also watching weather in Australia, Russia, and Ukraine. DTN says Jordan bought an unspecified amount of milling wheat, while South Korea has an open tender for 130,000 tons of feed wheat, in place of their usual corn tender. Rain is delaying wheat planting in parts of Argentina, but long-term, the improved soil moisture is expected to be beneficial. France’s AgriMer says 80% of that nation’s wheat crop is good to excellent condition, compared to 75% a year ago. Allendale says SovEcon and IKAR have both reduced expectations for Russian wheat exports because of dry weather, now at 37.6 million and 36.5 million tons, respectively.