Market News

Soybeans decline with corn, wheat mixed

Soybeans were lower on fund and technical selling. Planting and development weather looks favorable in most of the Midwest, with generally warm, dry conditions in the near-term forecast. The critical test for beans will be weather during the pod filling stage this summer. Old crop export sales were below average and new crop sales were very light. Germany and Japan led the way on old crop, with a cancellation by unknown destinations, while Mexico and Taiwan were the reported new crop buyers against a cancellation by Japan. The final quarter of the current marketing year for soybeans, and corn, starts June 1st. Soybean meal and oil exports were up sharply on the week, with the U.S. filling at least some of the void left by Argentina. Argentina’s drought-stricken crop is now 78% harvested. Soybean meal futures were down and bean oil was up on the adjustment of product spreads.

Corn was mixed on bull spreading. Corn is watching U.S. planting weather, including much needed rain in parts of the southern Plains and warm, dry weather in most of the Midwest. Old crop and new crop export numbers were bearish with USDA expected to lower the export guess in the next supply and demand report June 9th. Old crop was a net reduction with solid sales to Mexico and Japan more than offset by bigger cancellations from China and unknown destinations. New crop sales were led by Canada and Honduras. Those recent cancellations by China are tied to Beijing looking for cheaper corn from Brazil’s second crop and attempts to reduce corn and soybean meal in feed rations, in favor of cheaper domestic or imported wheat. Either way, aside from solid corn for ethanol use and tight near-term supplies, the fundamental outlook for corn is turning negative because of expected record production in the U.S. and Brazil.

The wheat complex was mixed, consolidating after the recent decline. Rain is too late to help hard red winter wheat in the southern Plains, while spring wheat planting weather has improved in parts of the northern Plains. Soft red winter wheat remains in comparatively good condition ahead of widespread harvest activity. Old crop exports were a net cancellation but new crop sales were decent. China and Nigeria topped the list for old crop weather, but those were canceled out by net reductions from Japan and unknown destinations. New crop sales were mainly to Japan and Guatemala. The 2023/24 marketing year for wheat gets underway June 1st. Russia continues to hold a large chunk of the global wheat market due to a significant price advantage. Their shipments are being boosted, at least partially, by purposefully slower inspections of Ukrainian vessels attempting to leave approved ports. There have been more reports this week of wheat imports by mills in the southeastern U.S.

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