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Weather concerns support soybeans, corn
Soybeans were higher on speculative and technical buying, starting the first full trading week of July on a solid note. China bought 264,000 tons of old crop U.S. beans, following up on last Thursday’s purchase of 126,000 tons of new crop, but overall, sales remain short of what’s needed to meet phase one obligations. The U.S. retains a price advantage over Brazil, but political issues between the U.S. and China are likely limiting Beijing’s demand. The USDA’s attaché for China estimates 2019/20 soybean imports at 90 million tons, climbing to 91 million in 2020/21, while 2020/21 domestic production is pegged at 18 million tons. Weekly export inspections were bullish with the USDA’s weekly export sales numbers out Thursday. The trade is also watching potentially stressful crop weather in parts of the Midwest and Plains. The USDA says 31% of U.S. soybeans are blooming, compared to 24% on average, and 2% are at the pod setting stage, compared to the five-year average of 4%, with 71% of the crop in good to excellent shape, unchanged, but with 1% moving from good to excellent. Soybean meal and oil were higher, following beans.
Corn was modestly higher on speculative and technical buying after the long holiday weekend. China bought 204,000 tons of new crop U.S. corn and Mexico picked up 182,880 tons of U.S. corn. The breakdown for Mexico was 121,920 tons for 2020/21 and the remaining 60,960 tons was for 2021/22. China also bought 202,000 tons of 2020/21 U.S. corn last Thursday. The USDA’s attaché in China has domestic 2020/21 corn production at 250 million tons, down 4% from 2019/21 because of Fall Armyworm infestations and lower planted area, with consumption declining because of high prices and poor quality. 2020/21 sorghum imports are seen at 4 million tons, double the previous projection. Weekly export inspections for corn were bearish, with less than a quarter left in the 2019/20 marketing year for corn. Hot, dry weather is a concern in some key U.S. growing areas. As of Sunday, 10% of U.S. corn is silking, compare to 16% normally this time of year, and 71% of the crop is in good to excellent shape, down 2% on the week. Ethanol futures were steady to higher. The Rosario Grain Exchange says Argentina has exported a record 16.3 million tons of corn during the current marketing year, up 11% from this time last year, even with slowdowns related to COVID-19 and low water levels on the Parana River.
The wheat complex was mostly higher on short covering and technical buying, with most months rallying after early mixed activity. Chicago and Kansas City were watching harvest activity, and Minneapolis was up, watching development weather in the northern U.S. Plains. For winter wheat, 56% of the crop is harvested, compared to 55% on average, and 51% of the crop is called good to excellent, down 1% from a week ago. For spring wheat, 63% of the crop has headed, compared to 68% on average, and 70% of the crop is in good to excellent condition, up 1% from last week. The USDA’s new supply, demand, and production estimates are out Friday at Noon Eastern/11 Central. The USDA’s attaché for China estimates 2020/21 domestic wheat production at 134 million tons, down 1 million from the prior guess because of pre-harvest damage. IKAR and SovEcon expect Russia’s wheat exports to dip before recovering this fall. Harvest is underway in southern Russia. Weekly U.S. wheat export inspections were bearish, but it’s still early in the marketing year.
July 07, 2020 at 03:20AM
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Weather concerns support soybeans, corn - brownfieldagnews.com
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