Market News

Wheat sees modest gains as soybeans, corn fall further

Soybeans were lower on fund and technical selling. Recent rain has delayed planting, but parts of the U.S. and Midwest should see a drier pattern near-term, allowing some to catch up. Still, other areas are expected to see more rain, which could lead to acreage adjustments. The Rosario Grain Exchange left its estimate for Argentina’s soybean crop at 50 million tons, for now, adding the harvest is 44% complete and has been slowed down by weather problems. The full extent of damage and loss in southern Brazil due to flooding won’t be known for a while, but it’s expected to be extensive in some areas. CONAB’s next update on the 14^th will likely reflect at least some of the damage, not all. The USDA says soybean export sales last week were up modestly from the week before that, primarily to unknown destinations and Egypt. A handful of new crop sales were reported, almost evenly split between Japan and Taiwan. Soybean meal and oil were down on the losses in beans, shrugging off the good weekly sales numbers for products, both of which saw solid week-to-week improvements. How much of that rise in sales was due to the harvest delays in Argentina is an unknown, but it wasn’t enough to stave off a contract low in July bean oil. Egypt issued a tender for an unspecified amount of vegetable oils.

Corn was lower on fund and technical selling. That recent planting delaying rainfall has boosted soil moisture, which should be favorable for crop development, and key parts of the Corn Belt should be able to make some progress ahead of the next round of rain. The trade is also keeping an eye on crop damage reports from Argentina and potential stress on the second crop in central and northern Brazil. The Rosario Grain Exchange lowered its outlook for Argentina’s crop to 47.5 million tons, citing the leafhopper damage and weather-related stresses. The bourse says the crop is 25% harvested, compared to 32% this time last year. Mexico bought 132,080 tons of U.S. corn Thursday morning, with 60,960 tons for 2023/24 delivery and the remaining 71,120 for 2024/25. Last week, old crop corn exports sales were above the previous week, with Mexico and Japan leading the way, while new crop sale were routine, mostly to Mexico. Shipments remain ahead of the pace needed to meet USDA projections for the current marketing year, which runs through the end of August.

The wheat complex was higher on speculative and technical buying, along with the lower trade in the dollar during the session. There has been frost damage this week in parts of Russia, compounding dry weather issues. Forecasts have another chance of a freeze in some areas later this week and near-term rainfall in parts of Russia and Ukraine is expected to just be scattered. Stateside, a major U.S. winter wheat crop tour gets underway next week. The USDA’s updated supply, demand, and production numbers are out Friday at Noon Eastern/11 Central, including and updated look at U.S. winter wheat production and the first official look at new crop U.S. ending stocks. The new marketing year for wheat gets underway June 1^st. Old crop U.S. export sales rebounded from last week’s net cancelation while still being routine, mainly to South Korea and Brazil. New crop sales were good with Mexico and Panama topping the list. China’s Ministry of Agriculture has cleared farmers to plant GMO wheat, and corn, as part of Beijing’s ongoing efforts to improve food security. Egypt bought 420,000 tons of wheat, 360,000 from Russia and 60,000 from Romania.