Market News

Soybeans see modest gains after new export sale

Soybeans were modestly higher on short covering and technical buying, bouncing off the recent contract low. Weather looks favorable in most of the region, but the big month for soybean development is August. For now, consensus seems to be building that it will be a large crop, even with several months to go until harvest. Unknown destinations bought 510,000 tons of new crop U.S. soybeans and 150,000 tons of new crop soybean meal ahead of the open, which could turn out to be China when it’s time for delivery. The new marketing year starts September 1^st for soybeans and October 1^st for soybean products. Weekly old crop sales were 13.2 million bushels, mainly to China and Egypt, with new crop at 13.8 million bushels, with unknown destinations and Mexico topping the list. Soybean meal was lower and bean oil was higher on the adjustment of product spreads, with both continuing to eye crush margins.

Corn was lower on speculative and technical selling. Corn is monitoring development weather, expecting solid yields in most of the Corn Belt, with the USDA’s next projection out August 12^th. However, there is a chance for a drier trend in northern and western growing areas into next month and there are continued uncertainties about this year’s harvested acreage due to flooding and this week’s derecho. Corn’s currently grappling with large old and new crop supplies, but ethanol and export demand are solid. Old crop corn export sales were 17.2 million bushels, primarily to Japan and Mexico, but with a significant cancelation by unknown destinations, while new crop sales of 19.1 million bushels were mostly to unknown destinations and Mexico. China’s General Administration of Customs says June corn imports were 910,000 tons, a drop of more than 50% on the year and the lowest for the month in four marketing years. That followed strong imports earlier in the marketing year, mostly from Brazil. Corn also has an eye on dry weather impacting production in Russia and Ukraine. The Buenos Aires Grain Exchange says 79% of Argentina’s corn crop has been harvested.

The wheat complex was mixed, with Chicago down, Kansas City mostly firm, and Minneapolis up. Drought is ongoing in the Black Sea region and there are quality issues in parts of Europe caused by heavy rain during key development periods. Stateside, the trade’s watching U.S. winter wheat harvest activity ahead of potential rain delays in the southern plains and spring wheat development conditions, with the potential for a shift to hotter, drier conditions in some areas, which could cause crop stress. U.S. wheat export sales were up sharply on the week at 21.3 million bushels, with South Korea and Mexico leading the way, against a cancelation by unknown destinations. China’s General Administration of Customs says June wheat imports were 1.19 million tons, bringing the quarterly total to 5 million tons.