Market News

Corn up, watching end of planting

Soybeans were steady to firm on spread trade and short covering. It was an up and down day, but with a mostly higher undertone thanks to spillover from the broader market and improvements in export demand. The Dow was sharply higher on surprising May job numbers, while the USDA announced two new U.S. soybean export sales Friday morning to unknown destinations, 258,000 tons (60,000 tons for 2019/20 and 198,000 tons for 2020/21) and 330,000 tons (196,000 tons for 2019/20 and 134,000 tons for 2020/21). Those sales brought the week to date total to more than a 1 million tons, mostly to unknown and mostly new crop. The general sentiment is the bulk of the recent sales are to China. The U.S. Census Bureau says soybean exports during April were 2.16 million tons, the smallest for a month since June 2017, mainly to China, with cumulative sales are nowhere near the mark need to meet Phase One trade agreement commitments. The trade is also watching U.S. planting and development weather. Soybean meal was mixed, consolidating, and bean oil was up, following crude oil. The Buenos Aires Grain Exchange says 98.6% of Argentina’s soybean crop is harvested, leaving production at 49.5 million tons.

Corn was modestly higher on short covering and technical buying. Corn was also keeping an eye on the weather, expecting many producers to wrap up planting soon. The USDA’s planted area totals are out on the 30th, along with quarterly stocks data. Demand is a big question mark, with ethanol use below a year ago and increasing export competition from Argentina. The Buenos Aires Grain Exchange says 55.6% of Argentina’s corn crop is harvested, with production at 50 million tons. Corn is also watching the impact of weather on Brazil’s second crop, the larger of the two and the source of most of their exports. The USDA’s next set of international production estimates is out June 11th in the supply and demand report. Ethanol futures were higher.

The wheat complex was lower on profit taking and technical selling, along with the higher dollar. U.S. and world weather concerns are on the back burner, with the trade focused on winter wheat harvest activity. Warmer, drier weather could trim yields, especially for already dry parts of the hard red winter crop, but keep harvest moving. That shift in weather would mostly be welcome for the soft red winter crop, which has been saturated by heavy rainfall and flooding in some areas. Spring wheat planting conditions generally look good in the northern U.S. Plains and Canada, but parts of the region need precipitation, leading to concerns about development. The trade is also watching weather in the European Union and the Black Sea region. Rainfall coverage is expected to be good in Ukraine but could miss some of the driest parts of Russia. Strategie Grains lowered its’ outlook for France’s soft wheat crop to 32 million tons. The Buenos Aires Grain Exchange says 30% of Argentina’s wheat crop is planted. The USDA’s attaché for India estimates 2020/21 wheat production ta a record 107.2 million tons.

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