Market News

Wheat gives back some gains

Soybeans were mixed, mostly modestly higher. The USDA’s May crush numbers were positive and margins remain bullish, which should continue to support crush activity. The national condition rating held steady with development ahead of average. Final acreage is still kind of a question mark, there were nearly 13 million acres unplanted prior to the release of the recent USDA planted area report, and there are still months to go until harvest, but at this point, it looks like there will be a sizable U.S. crop this year. Soybean meal was mixed on bull spreading, while bean oil was higher on the crush outlook and talk Indonesia will hit China with significant import tariffs, which would send Beijing elsewhere for vegetable oils. The USDA’s Foreign Ag Service cut its projection for Brazil’s soybean crop to 150 million tons because of flooding in Rio Grande do Sul along year-to-year decreases for yield in other states. CONAB’s updated production guess for Brazil is out July 11^th, with the USDA’s new set of supply, demand, and production estimates released July 12^th.

Corn was mixed, mostly firm. The U.S. corn rating slipped from week-to-week and there’s more rain this week in parts of the Corn Belt that have already been hit by flooding. That furthers this year’s big question for corn: what is the actual acreage? Planting delays were widespread and there will need to be some replanting in a few key U.S. growing areas following that flooding. The USDA’s prevent plant numbers start rolling in this August. Colombia bought 100,000 tons of old crop U.S. corn ahead of the open.  Colombia is the second biggest buyer of U.S. corn in the Western Hemisphere, following Mexico. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. StoneX lowered its outlook for Brazil’s combined corn crop to 121.2 million tons, 0.5% less than last month’s guess, on a 0.6% decline for the second crop.

The wheat complex was lower on profit taking and technical selling. The winter wheat harvest has passed the halfway point, with some key states approaching the 90% mark, potentially wrapping up the harvest by mid-month. The star has been hard red winter wheat, helped significantly by better rainfall in parts of the central and southern U.S. Plains, which has improved yields and led to a decrease in acreage abandonment. The USDA’s spring wheat rating was below a week ago, but still well above this time last year. There is rain in the forecast for parts of the northern U.S. Plains. Drought continues to expand in the Black Sea region, impacting Russia and Ukraine. The European Union’s crop agency MARS reduced its estimate for Russia’s wheat crop to 82.5 million tons, below the five-year average, citing the weather issues to throughout the growing season. That’s generally in-line with recent cuts by other private and national firms.