Corn, soybeans and most wheat contracts faced double-digit losses Monday
Crop quality is on its heels, but the expectation that the Corn Belt will soon return to a pattern of cooler, wetter weather sent crop prices tumbling to start the week. September corn contracts dropped more than 5%, with soybean futures losing around 2.5% today. Wheat losses were more muted, but some contracts were down more than 2% and only Chicago SRW futures avoided double-digit losses by the close.
Little rain is expected across the central U.S. between Tuesday and Friday, although drought-stressed portions of Iowa and Minnesota could get another drink during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook calls for near-normal temperatures for the central U.S. between June 21 and June 27, with a return to seasonally wet weather for much of the Midwest and Plains next week.
On Wall St., the Dow faced afternoon losses of 219 points, falling to 34,260. Investors eagerly await news from a Federal Reserve later this week and continue to fret over rising inflation and the possibility of higher interest rates. Energy futures were mixed. Crude oil saw fractional gains this afternoon, hovering just below $71 per barrel. Diesel dropped 0.3%, with gasoline down nearly 0.5%. The U.S. Dollar softened slightly.
Last Friday, commodity funds were net sellers of corn (-15,000), soybeans (-15,000), soyoil (-25,000) and CBOT wheat (-3,000) contracts but were net buyers of soymeal (+2,000).
Corn prices continue to show plenty of sensitivity to weather forecasts as the young crop tries to gain some positive momentum. Traders expect to see crop quality degrade this past week, but friendlier forecasts for the Corn Belt moving forward caused prices to sag on a round of technical selling today. July futures fell 25.75 cents to $6.5875, with September futures down 32.75 cents to $5.97.
Corn basis bids tilted 3 cents higher at a Nebraska processor and a penny higher at an Iowa river terminal Monday while holding steady elsewhere across the central U.S. today.
Corn export inspections reached 60.8 million bushels for the week ending June 10, moving slightly above the prior week’s tally. That was on the lower end of trade estimates, which ranged between 59.1 million and 82.7 million bushels. Japan was the No. 1 destination, with 21.3 million bushels. Cumulative totals for the 2020/21 marketing year are still well above last year’s pace, with 2.125 billion bushels.
Ahead of the next weekly crop progress report from USDA, out later this afternoon, analysts expect the agency to show corn quality at 69% rated in good-to-excellent condition through Sunday, falling another three points from the prior week.
Per the latest data from the European Commission, EU corn imports for the 2020/21 marketing year reached 548 million bushels through June 13, trending significantly below last year’s pace so far.
Preliminary volume estimates were for 394,508 contracts, trending 22% lower than Friday’s final count of 508,194.
Soybean prices also faced a round of technical selling after forecasts are expected to improve across the Midwest and Plains in the coming days. Prices closed around 2.5% lower amid a choppy session. July futures dropped 36.75 cents to $14.7175, while August futures lost 42.75 cents to $14.3975. Soymeal and soyoil contracts faced similar percentage drops today.
Soybean basis bids tumbled 40 cents lower at an Illinois river terminal Monday and softened 5 to 10 cents lower at three other Midwestern locations today.
Soybean export inspections only came in around half of the prior week’s total, with 4.7 million bushels for the week ending June 10. That was also below the entire range of trade guesses, which came in between 5.5 million and 11.0 million bushels. Mexico led all destinations, with 1.4 million bushels. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace, with 2.087 billion bushels.
Ahead of Monday afternoon’s weekly crop progress report from USDA, analysts expect the agency to dock soybean crop quality another two points, moving to 65% rated in good-to-excellent condition. Planting progress is expected to move from 90% a week ago up to 95% through Sunday.
European Union soybean imports for the 2020/21 marketing year have reached 534.6 million bushels through June 13, which is trending slightly below last year’s levels so far. EU soymeal imports are moderately below last year’s pace, with EU canola imports tracking slightly higher year-over-year.
Brazil’s Abiove is holding its predictions steady for the country’s 2021 soybean production potential from previous estimates of 5.052 billion bushels. The overall consensus among consultancies and governmental groups is showing increased confidence that Brazilian soybean production will top 5.0 billion bushels this season.
Preliminary volume estimates were for 238,976 contracts, falling moderately below Friday’s final count of 308,455.
Wheat prices followed corn and soybeans lower on a round of technical selling Monday. Losses from individual contracts ranged between 1% and 2.4%, with spring wheat contracts facing the most downside today. September Chicago SRW futures fell 7.75 cents to $6.78, September Kansas City HRW contracts dropped 11.25 cents to $6.3450, and September MGEX spring wheat futures lost 17 cents to $7.5425.
Wheat export inspections slipped slightly lower week-over-week, to 17.6 million bushels. That was still toward the upper end of trade guesses, which ranged between 10.1 million and 18.4 million bushels. The Philippines topped all destinations, with 3.3 million bushels. Cumulative totals for the young 2021/22 marketing year, which began June 1, are at 24.7 million bushels.
Prior to this afternoon’s crop progress report from USDA, analysts think the agency will show winter wheat quality ratings stable, with 50% of the crop rated in good-to-excellent condition. However, analysts think spring wheat crop quality has degraded another two points, falling to 36% rated in good-to-excellent condition.
In Europe, 2020/21 soft wheat exports reached 914.2 million bushels through June 13, facing a year-over-year decline of nearly 27% so far. EU barley exports are fractionally below last year’s pace, with 324.5 million bushels.
Preliminary volume estimates were for 140,424 CBOT contracts, slipping slightly below Friday’s final count of 142,588.
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