Market News

Collapse continues for corn, soybeans, wheat

Soybeans were lower on fund and technical selling, ending the week mixed, with nearby months up and deferred contracts down. Some forecasts had a better chance of rain in parts of the Midwest, but likely not enough to break drought conditions. Still, the critical month for soybeans is August, so there is time, with El Nino conditions expected to fully emerge later this summer. Contracts were lower for the second day in a row, but also closed above the session’s lows for the second day in a row due to the uncertainties about this year’s production. Soybean meal sales were sharply lower on follow-through selling, while bean oil was sharply higher on product spread trade and demand expectations. Weekly old crop soybean export sales were quite a bit larger than average, with Taiwan and Mexico topping the list, with routine new crop sales, also mainly to Mexico and Taiwan. Brazil continues to dominate the global market. The Buenos Aires Grain Exchange left its 2022/23 soybean production estimate for Argentina at 21 million tons.

Corn was sharply lower on fund and technical selling, cementing a lower weekly finish. Near-term conditions look mostly warm and dry for much of the region, with only scattered rainfall in most outlooks, but any rain would be welcome in some key growing areas. While corn has likely lost some yield potential and it probably won’t be a record crop, a more consistent rainfall pattern would help stabilize conditions. The USDA’s weekly crop progress and condition numbers are out Monday afternoon. Weekly export numbers were bearish for both old and new crop. The big buyers on old crop were China and Mexico, but those were largely canceled out by a cancellation from unknown destinations, while Honduras led the way on new crop. U.S. corn continues to face a lot of competition from Brazil. Brazil’s second crop harvest is ongoing with record expected production. In Argentina, the Buenos Aires Grain Exchange cut its outlook for the 2022/23 corn crop another 2 million tons to 34 million, citing yields, with 43.6% of the harvest complete.

The wheat complex was lower on fund and technical selling, with the most active months at the three U.S. pits seeing week-to-week gains. Harvest conditions generally look favorable for hard and soft red winter. The trade is closely watching yield numbers and rates of abandonment in the central and southern U.S. Plains. Parts of the spring wheat region in the northern U.S. Plains and Canada have recently received some much-needed rainfall. U.S. spring wheat acreage has been a question mark following early planting delays, with some answers expected in the planted area totals out on the 30^th. Quarterly grain stocks numbers are also out on the last day of June. Dry weather is also an issue in parts of India, Germany, and Russia, and could be a concern in Australia, depending on the strength of El Nino. U.S. wheat export sales were down on the week. The primary purchasers were Taiwan and Peru, with a small amount sold for next marketing year, most of that to Peru. It’s early, but 2023/24 is trailing the 2022/23 pace. Russia continues to hold a big chunk of the export market. The Buenos Aires Grain Exchange says 58.1% of Argentina’s 2023/24 wheat crop is planted, lowering the expected area projection slightly because of dry weather in western growing areas. The wheat harvest is reportedly underway in France.