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U.S. grains: Soy climbs on uncertain weather, strong exports

Wheat sags on harvest pressure; K.C. wheat to 10-year low

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures rose on Monday, retracing a portion of last week’s heavy declines, as attention turned to weather risks and strong export demand ahead of closely watched U.S. government crop reports, analysts said.

Wheat futures sank on harvest reports of large U.S. yields at a time of ample world stocks, and corn closed narrowly mixed, erasing early advances as wheat sagged.

At the Chicago Board of Trade, the July soybean contract settled up 30 cents at $11.33 per bushel (all figures US$). July wheat ended down eight cents at $4.46-3/4 a bushel and July corn closed up 3/4 cent at $3.85-1/4 a bushel.

Soybeans climbed on forecasts for a return to hot temperatures in the second half of July.

“It’s very uncertain, but in the 16- to 30-day (forecast), we could have some heat come back again. The weather forecast for out in the 16- to 30-day is more threatening on soybeans than corn,” said Don Roose, president of Iowa-based U.S. Commodities.

Near-term forecasts called for cooler temperatures, which should benefit the corn crop as it starts to pollinate in the heart of the Corn Belt. However, portions of the region need moisture.

“Timely rains have maintained crop ratings, but deficits continue to build, with previously ample subsoil moisture in decline,” Arlan Suderman of INTL FCStone said in a note to clients.

After the CBOT close, the U.S. Department of Agriculture rated 72 per cent of the U.S. soybean crop in good to excellent condition, down from 73 percent the previous week and in line with analyst expectations.

USDA rated 75 per cent of the U.S. corn crop as good to excellent, bucking analyst expectations for a downgrade.

USDA is set to release closely watched stocks and plantings estimates on Thursday.

Those reports will show the extent to which brisk export demand has whittled down corn and soybean inventories, and whether farmers planted more soybeans and less corn than initially expected due to a spring rally in soy prices.

“Soybeans certainly have the tightest balance sheet when you look at corn, beans and wheat,” Rabobank senior grains analyst Graydon Chong said. “We see the weather driving that market and we have seen pretty strong Chinese demand.”

USDA confirmed sales of another 150,000 tonnes of U.S. soybeans to unknown destinations on Monday, following sales announcements of more than 400,000 tonnes on Friday.

CBOT wheat fell on harvest pressure, and the spot K.C. hard red winter wheat contract hit a 10-year low at $4.12-1/2 a bushel.

“Wheat prices are lower as producers continue to bring in some remarkable yields, particularly in the Plains,” Suderman said, adding, “The strong dollar and weak euro mean those extra bushels will have a very hard time competing with European wheat on the global market.”

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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