Market News

Soybeans, corn, wheat up ahead of Monday’s reports

Soybeans were solidly higher on fund and technical buying but finished the week lower. Soybean products were up on solid demand, the broader market was mostly bullish during the session, and the dollar index was down. There is some rain in the forecast for parts of the Plains and Midwest this week, potentially stabilizing yields in some areas ahead of the harvest. Taiwan bought 104,000 tons of new crop U.S. soybeans Friday morning, but demand uncertainties for China are ongoing due to COVID lockdowns. The USDA’s attaché in China has lowered its import outlook for the world’s biggest buyer, citing those COVID restrictions and economic issues, now pegging 2021/22 purchases at 92 million tons and 2022/23 at 96.5 million tons. The office also reduced its outlook for China’s domestic 2022/23 crop because of drought and high temperatures in some key growing areas. The USDA is set to release four weeks of U.S. export sales numbers on Thursday the 15^th. According to sources in Argentina, the government’s recent change to the exchange rate for soybeans has greatly increased farmer selling. Harvest is ongoing in Ukraine with reports pegging the running total for sunflower at 392,000 tons and soybeans at 70,900 tons. Prior to the invasion by Russia, Ukraine was the world’s leading exporter of sunflower oil.

Corn was higher on fund and technical buying, adding to the week’s gains. Corn was monitoring the broader market and early yield numbers, with most analysts expecting the USDA to lower its projection Monday. The USDA is also expected to lower the planted area total for corn following the recent Farm Service Agency data. The USDA’s new supply, demand, and production numbers, along with updated FSA acreage figures, are out Monday the 12^th at Noon Eastern/11 Central. Reports have 60% of Ukraine’s grain harvest complete, with the running total for corn at 18,400 tons. In South America, the trade has an eye on conditions ahead of widespread planting in Argentina and Brazil, and the potential impact from a third consecutive La Nina, expected to start later this year.

Wheat was sharply higher on fund and technical buying, cementing a higher weekly finish across the complex. There was support from the lower dollar, potentially helping U.S. export sales, as wheat waits for developments in the Black Sea region. An upcoming meeting between Russia and Turkey could impact Ukraine’s export pace. Russia’s invasion of Ukraine has not only disrupted export business, but limited the available grain storage space, adding to the issues during harvest. Reports from Ukraine have the running total for the current wheat harvest at 19.2 million tons. IKAR now estimates Russia’s wheat crop at a record 97 million tons, with wheat exports of 46 million tons. Monday’s USDA supply and demand report is expected to have minimal changes for the domestic numbers, with the most significant adjustments possibly on the global side of the ledger. Taking China out of the equation, the USDA is already projecting the tightest global supply of wheat in more than a decade.