Market News

Soybeans down on profit taking

Soybeans were modestly lower on profit taking and technical selling, unable to follow through on the early gains. The USDA says planting last week was slower than anticipated and the crop is in much worse shape than a year ago, with the lowest condition ratings in the eastern Midwest. The first rating of the year was the third lowest on record at 54% good to excellent, compared to 73% a year ago. Still, demand is slow, largely because of China’s tariff on U.S. beans, and many expect at least some increase in U.S. acreage when compared to March’s prospective planting report. Trade talks between the U.S. and China are ongoing ahead of an expected meeting between Presidents Trump and Xi at the G20 later this week in Japan. Even with the surge in price, U.S. supplies are cheaper than South America, but again, China’s tariffs are restricting demand. DTN says China’s soybean imports during May were down on the year because of the continued spread of African Swine Fever. Soybean meal and oil followed beans lower.

Corn was mixed, with nearby contracts firm and deferred months modestly lower. Corn planting is nearly wrapped up, slower than normal and continuing to show the impact of weather, with concerns about condition after the USDA lowered the national rating Monday. The USDA’s quarterly grain stocks numbers are out Friday, along with an acreage guess. That acreage guess will likely be disregarded quickly and if the USDA is going to resurvey producers ahead of the August crop numbers, it will reportedly by announced Friday. The USDA’s prevent plant numbers are out in August. The issues have helped push cash levels to five-year highs and while the upper Mississippi River has reopened to barge traffic, there have been logistical issues clearing the backlog. The projected tighter supply of new crop corn and lower protein content of hard red winter wheat are expected to lead to increased feed wheat usage. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The trade is also waiting to see what happens next with the USMCA.

The wheat complex was mixed, with Chicago down modestly, Kansas City mostly firm, and Minneapolis up modestly. Most forecasts have better weather for winter wheat harvest activity, but hard red protein is down on the year and there are concerns about soft red quality after wetter than normal conditions during key periods. The USDA’s spring wheat condition rating was down on the week, supporting Minneapolis. Minor adjustments, if any, are expected for the spring wheat acreage number later this week, but the USDA counting “intended” acres along with area that’s actually been planted has led to some confusion. Beneficial rainfall is in the forecast for parts of the northern U.S. Plains and Canadian Prairies. Wheat is also watching the weather in Australia, Europe, Russia, and Ukraine. DTN says Jordan is tendering for 120,000 tons of milling wheat from any origin and Syria is in the market for 200,000 tons of milling wheat from Russia.