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World weather concerns support wheat


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World weather concerns support wheat

Soybeans were higher on commercial and technical buying but ended the week lower. China bought 131,000 tons of new crop U.S. beans, their first reported purchase since June 24th. That followed up Thursday’s sale of 300,000 tons of 2021/22 beans to unknown destinations, which could turn out to be China when it’s time for delivery. The U.S. Gulf beans now have a price advantage over Brazilian FOB beans starting in September. The trade is also watching U.S. development conditions during these key growth stages as beans will need a trend-line yield or better to meet demand. A survey from Farm Futures has the crop at 4.45 billion bushels with an average yield of 51.3 bushels per acre. Carryout projections through the end of next marketing year are historically tight. That new marketing year starts September 1st. Additionally, world vegetable oils were higher, adding to the support. Soybean oil was up, following those global vegetable oils, while bean meal was mixed, adjusting spreads. Levels on the Parana River continue to fall, limiting the amount of goods that can reach ports in Argentina. Safras e Mercado says 23.7% of Brazil’s 2021/22 crop has been sold, with production estimated at 142.24 million tons, with planting set to get underway in some areas next month.

Corn was mostly modestly higher, adjusting spreads, finishing higher for the week. Corn is watching development conditions and looking for any clues about USDA adjustments in the reports on the 12th. Corn will also need a trend-line yield or better to bolster supplies, meet expectations, and limit further cost increases for end users. Some drier growing areas are expected to see rain in the coming week, but totals and actual coverage are uncertain. A survey from Farm Futures has production at 15.1 billion bushels with an average yield of 178.7 bushels per acre. The USDA’s weekly crop progress and condition numbers are out Monday at 4 Eastern/3 Central and the supply, demand, and production reports are out Thursday at Noon Eastern/11 Central. CONAB’s updated outlook for Brazil will be out on Tuesday morning. Projections for their key second crop have dropped over the past few months due to planting delays, inclement conditions during development, and a few frost/freeze events over the past few weeks. 83% of Argentina’s corn crop is reportedly harvested. Ethanol futures were steady.

The wheat complex was higher on commercial and technical buying, with the three U.S. exchanges all posting solid week to week gains. Estimates have declined for production in the U.S., Canada, and Russia due to weather issues. Most analysts are expecting the USDA to lower their official estimates in the next round of updates on the 12th. Rain in the spring wheat region will mostly be too late to help the crop. There’s been some rainfall in parts of the U.S. and Canada, but not nearly enough to break the drought. The dry conditions in the northwestern U.S. Plains are also expected to impact white winter wheat planted area. Export demand for U.S. wheat is still slow, but there are signs global demand is picking up steam due to production concerns for some major sellers. DTN says Tunisia is tendering for 100,000 tons of milling wheat and Bangladesh is in the market for 50,000 tons of wheat, while South Korean buyers issued three tenders: 50,000 tons each from the U.S. and Australia, along with 35,100 tons from Canada. DTN adds Japan bought 92,285 tons of food wheat from the U.S. and Canada and Taiwan picked up 48,000 tons of U.S. milling wheat.





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