Market News

Soybeans, corn down, expecting planting progress

Soybeans were lower on fund and technical selling as contracts continued a correction after failing to break overhead resistance. Planting remains slower than normal but is expected to improve in some key U.S. growing areas this week. The trade is waiting to see what happens later this week at the G20 summit. President Trump and President Xi are expected to meet face to face Saturday to talk tariffs. Beijing’s tariff on U.S. beans have slowed down exports drastically, with less than a quarter left in the current marketing year. Unknown destinations did buy 145,000 tons of old crop U.S. beans Wednesday morning. The USDA’s weekly export sales numbers are out Thursday morning. The continued spread of African Swine Fever is China is affecting soybean demand, with the Ministry of Customs reporting purchases from Brazil during May were 6.3 million tons, down 31% on the year. Soybean meal and oil followed beans lower.

Corn was lower on fund and technical selling. Parts of the Midwest and Plains have seen another round of rainfall, but others could wrap up planting soon, ending the longest recorded planting period in U.S. history. The USDA’s updated acreage and quarterly stocks numbers are out Friday. With the planting issues, the acreage numbers might be disregarded immediately, with many waiting for the prevent plant totals in August. The uncertainty has helped push basis levels higher but has also priced corn above most export competitors. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.072 million barrels a day, down 9,000, while stocks were 46,000 barrels lower at 21.567 million, a more than one-year low as blending demand continues to rise.

The wheat complex was higher on short covering and technical buying. While spring and winter wheat condition ratings were down on the week, both crops remain in better shape than this time last year. Chicago took the lead with soft red winter in worse condition than hard red winter. General improvements in weather should help the winter wheat harvest pace pick up steam and aid spring wheat development. The trade is also watching weather in Australia, Canada, Europe, Russia, and Ukraine. There are areas of concern, but for now, the fundamental outlook remains bearish with the next set of supply and demand numbers out July 11^th. According to Allendale, Iraq’s local wheat purchases this season are 3.5 million tons, potentially hitting a record 4 million. DTN says the Philippines is tendering for 200,000 tons of feed wheat.