Market News

Soybeans higher ahead of July 4th break

Soybeans were higher on commercial and technical buying. Soybeans saw some spillover from bean oil along with support from solid crush margins. Development conditions for U.S. beans look benign for most of the region. Unknown destinations bought 110,100 tons of U.S. beans Wednesday morning, with 55,100 tons for 2023/24 and 55,000 tons for 2024/25. Brazil’s currency has rallied recently, but it remains to be seen if that leads to a sustained improvement in export demand for U.S. beans. AgroConsult expects Brazil’s farmer to plant fewer soybean acres in 2024/25. CONAB’s updated outlook for Brazil is set for July 11^th, with the USDA’s new supply, demand, and production report out on the 12^th. Soybean meal was mixed on spread trade and oversold signals, while soybean oil was up on demand expectations. That’s tied to talk Indonesia will hit China with an import duty, which would probably send Beijing elsewhere for vegetable oil needs.

Corn was lower on profit taking and technical selling. Development weather looks mostly favorable, but there is more rain in the forecast for some already soaked areas of the Corn Belt. Export demand and corn for ethanol use are both strong. The U.S. Energy Information Administration says ethanol production averaged 1.064 million barrels per day, up 21,000 on the week and 4,000 on the year, with stocks reported at 23.594 million barrels, an increase of 171,000 from the week before and 1.334 million from a year ago. The RFA says May ethanol exports of 154.4 million gallons were record large for the month, but a drop of 28% from April due to fewer recipients. Canada took the top spot for the 38^th month in a row, followed by the Philippines, the European Union, South Korea, and Singapore. DDGS exports of 1.01 million tons were 4% higher, primarily to Mexico, South Korea, and the E.U. AgroConsult pegs Brazil’s corn crop at 126.5 million tons, down 10.7% on the year, with a 9.9% decline for the second crop. That’s due to lower yields and acreage. The firm puts Brazil’s 2023/24 corn exports at 42.1 million tons, 23% less than 2022/23, noting slower farmer selling as producers hold out for higher prices. Argentina is getting set to ship corn to China for the first time in 15 years.

The wheat complex was lower on profit taking and technical selling. Some near-term U.S. winter wheat harvest delays are likely, but most of those are not expected to be significant. For spring wheat, forecasts generally have wet, cool weather in most of the northern U.S. Plains and Canada, limiting early development. The trade’s also watching harvest in Russia and the expanding drought in the Black Sea region, likely impacting mostly spring wheat in both Russia and Ukraine. SovEcon did increase their outlook for Russia’s total wheat crop to 84.1 million tons. Russia continues to hold the cheapest wheat price in the world, helping Moscow maintain its edge on the export market. The USDA’s weekly export sales numbers are out Friday morning, with offices and commodity markets closed Thursday.