Corn, soybeans and wheat contracts spill into the red Tuesday
The prospect for relatively cool, wet forecasts for the Midwest and Plains next week kickstarted another round of technical selling today, despite USDA reporting lower-than-expected quality ratings late Monday. September corn contracts faded more than 1.3% lower by the close, with some wheat contracts losing more than 2.5%. Soybean prices were also on the ropes today, dropping 1.25%.
Between Wednesday and Saturday, the Plains will see zero to trace amounts of additional rainfall, while small portions of northern Illinois and southern Wisconsin could gather as much as 1” or more during this time, according to NOAA’s latest 72-hour cumulative precipitation map. The agency’s 8-to-14-day outlook still predicts seasonally cool, wet weather for most of the Corn Belt between June 22 and June 28,
On Wall St., the Dow was on its heels again after losing 69 points in afternoon trading to 34,324. Investors are still awaiting more news – especially regarding interest rates and inflation trends – from a two-day policy meeting from the Federal Reserve that began earlier today. Energy futures were mixed. Crude oil ratcheted ahead another 1.7% to reach $72 per barrel, while gasoline and diesel faced modest drops this afternoon. The U.S. Dollar firmed slightly.
On Monday, commodity funds were net sellers of all major grain contracts, including corn (-21,000), soybeans (-13,500), soymeal (-6,500), soyoil (-6,000) and CBOT wheat (-5,500).
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Corn prices were mixed after traders struggled to balance lower-than-expected quality ratings with the prospect of better weather forecasts likely to spread across the central U.S. later in June. July futures firmed 7 cents to $6.6625, while September futures softened 8.25 cents to $5.9025.
Corn basis bids were mixed at two Midwestern processors Tuesday but held steady elsewhere across the central U.S. today.
Corn quality ratings tumbled another four points lower this past, with 68% of the crop now rated in good-to-excellent condition through Sunday. The average trade guess was slightly higher, at 69%. Another 27% of the crop is rated fair (up four points from last week), with the remaining 5% rated poor or very poor (unchanged from a week ago).
Physiologically, 96% of this year’s corn crop is now emerged, up from 90% a week ago. That’s slightly favorable to 2020’s pace of 94% and moderately ahead of the prior five-year average of 91%.
For the first time in several years, China plans to sell a modest amount of imported corn this Friday to replenish depleted stocks and cool off domestic prices. The grain – totaling nearly 1.5 million bushels – was originally purchased from Ukraine.
The results of the latest Farm Progress PANEL survey show a mix in marketing strategies as farmers set about pricing their 2021 crops. Below is a quick snapshot of the results – and click here to read more analysis on the topic.
Preliminary volume estimates were for 388,513 contracts, coming up slightly short of Monday’s final count of 394,508.
Soybean prices eroded steadily throughout Tuesday’s session after a round of weather-related technical selling today. A relatively disappointing crush report from NOPA created additional headwinds. July futures dropped 8.5 cents to $14.6375, while August futures lost 18 cents to $14.2325.
Soybean basis bids tilted 5 cents lower at an Indiana processor on Tuesday but held steady across other Midwestern locations today.
Soybean planting progress reached 94% through Sunday, up from 90% a week earlier but a point slower than the average trade guess of 95%. That’s still well above the prior five-year average of 88%, however. Emergence is at 86%, also very favorable compared to the prior five-year average of 74%. Soybean quality ratings stumbled significantly, dropping five points from a week ago to 62% rated in good-to-excellent condition.
The National Oilseed Processors Association has reported a May U.S. soybean crush of 163.521 million bushels. That’s up from April’s crush of 160.310 million bushels but a year-over-year decline of 3.6%. It was also moderately below the average trade guess of 165.120 million bushels.
NOPA also reports that domestic soyoil stocks continue to decline, moving from 1.702 billion pounds in April down to 1.671 billion pounds through the end of May. Soymeal exports improved to 714,377 metric tons in May versus a 22-month low of 689,441 MT in April.
Click here to take our ongoing farmer survey on crop progress, which populates our weekly “Feedback From The Field” stories. This Google Map, updated daily, shows all past responses for our readers.
Preliminary volume estimates were for 230,884 contracts, inching slightly below Monday’s final count of 236,029.
Wheat prices declined in tandem with corn and soybean prices, with yield friendly forecasts for both the United States and Europe creating additional downward pressure today, especially for winter wheat contracts. September Chicago SRW futures dropped 14 cents to $6.65, September Kansas City HRW futures lost 16.75 cents to $6.1950, and September MGEX spring wheat futures slipped 1.5 cents to $7.5250.
Quality ratings declined two points for the 2020/21 winter wheat crop, despite analysts expecting to see those numbers hold steady week-over-week. Through Sunday, 48% of the crop is rated in good-to-excellent condition. The winter wheat harvest is only at 4%, meantime, up from 2% a week ago but falling further behind 2020’s pace of 14% and the prior five-year average of 15%.
Spring wheat quality ratings slipped a point lower, with 37% rated in good-to-excellent condition. Analysts were expecting to see a two-point decline. Ninety-six percent of the crop is now emerged, with 8% now headed.
Russia’s Sovecon consultancy estimates that the country’s May wheat exports fell to a 2020/21 marketing-year low of 4.7 million bushels. June wheat exports are expected to recover to a more respectable 84.5 million bushels, which will be the highest monthly total since February, if realized. Russia is the world’s No. 1 wheat exporter.
A German association of farm cooperatives thinks all-wheat production will rise 3.8% this year to 844.4 million bushels, citing good weather. Germany is Europe’s No. 2 wheat producer, trailing only France.
The Philippines issued a tender to purchase 7.5 million bushels of milling and animal feed wheat that closes today. The grain is for shipment in August and September.
Japan issued a regular tender to purchase 7.6 million bushels of food-quality wheat from the United States, Canada and Australia that closes later this week. Of the total, 53% is expected to be sourced from the U.S. The grain is for shipment in August.
South Korea purchased 2.4 million bushels of animal feed wheat from optional origins in an international tender that closed earlier today. The grain is for arrival by the end of October.
Preliminary volume estimates were for 132,522 CBOT contracts, drifting slightly below Monday’s final count of 140,424.
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