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Published May 27, 2014, 09:37 AM

Soybeans continue to impress

Wheat struggled last week, with most of the session seeing steady to lower closes. Improving weather conditions in the major wheat producing regions of the U.S. caused traders to take the short side. For the week ending May 22, July Minneapolis dropped 8.25 cents, September Minneapolis dropped 9.25 cents, July Chicago slipped 15 cents and July Kansas City gave back 16 cents.

By: Ray Grabanski, Agweek

Wheat

Wheat struggled last week, with most of the session seeing steady to lower closes. Improving weather conditions in the major wheat producing regions of the U.S. caused traders to take the short side. For the week ending May 22, July Minneapolis dropped 8.25 cents, September Minneapolis dropped 9.25 cents, July Chicago slipped 15 cents and July Kansas City gave back 16 cents.

May 19 and 20 sessions had wheat trading mainly steady as the market looked for confirmation of improving weather forecasts. The May 19 disappointing export inspections estimate, which clearly is showing that wheat will not make its export sales pace, added selling pressure. The May 20 session had buying support from the May 19 friendly crop progress report, which showed another week of declining conditions. Improving weather conditions kept traders on their heels and limited wheat’s ability to hold gains.

The rest of the week saw selling move into the winter wheat contracts, while Minneapolis held its own May 21, but gave in to selling May 22. The winter wheat exchanges were under pressure from forecasts for rain across the driest regions of the Southern Plains. Wheat is heading, so any amount of rain will certainly help fill heads. It will not end the drought or save the crop, but it will increase the potential size of the crop. Dry conditions have moved into the Northern Plains, which is allowing for drills to get back into the fields. Planting progress for spring wheat is likely to show a huge increase in the May 27 crop progress report.

The U.S. Department of Agriculture estimated wheat export shipments pace for the week ending May 16 at 20.3 million bushels. Wheat export sales pace for the week ending May 16 was estimated at 12.9 million bushels, with 5.2 million old crop and 7.7 million new crop. With two weeks left in wheat’s export marketing year, shipments will need to average 37.97 million bushels and sales need to average 8.5 million to make USDA’s expectations of 1.185 billion.

As of May 18, 49 percent of the nation’s spring wheat crop had been planted, compared with 34 percent the previous week and 68 percent for the five-year average. Spring wheat emergence was estimated at 24 percent, compared with 12 percent the previous week and 40 percent for the five-year average. Fifty-seven percent of the nation’s winter wheat crop was headed, compared with 44 percent the previous week and 58 percent for the five-year average. Winter wheat crop conditions declined 1 percent to 29 percent good to excellent, 27 percent fair and 42 percent poor or very poor.

Corn

The corn market was lower again last week and traded down to support, with planting progress and ideal conditions in the Corn Belt. The weather is the market mover and there are no major concerns other than North Dakota. As of the May 22 close, the July contract was down 6.75 cents for the week, while the December contract lost 7.5 cents.

Corn lost another 10 cents on May 19 and 20 as commercial and noncommercial selling extended the recent downtrend. Corn planting came in at 73 percent complete and just below the five-year average of 76 percent. Emergence is ahead of the five-year average for most of the Corn Belt and reports are that the crop is in very good condition. The weather remains dry and warmer in the northern Corn Belt where progress is lacking. There was also talk that China is planning on canceling all of its old-crop purchases and is sourcing its corn from the Ukraine and Argentina.

The export inspections and sales came within estimates, although fresh sale announcements have been quiet. The ethanol report also showed corn use up and stocks down. Ethanol plants continue to operate with decent margins. The corn futures have dropped to the 50 percent retracement level between the low to recent high and those levels held to end the week.

Ethanol production for the week ending May 16 averaged 925,000 barrels per day, up .33 percent from the previous week. Total ethanol production for the week was 6.475 million barrels. Corn used in production the week ending May 16 is estimated at 97.13 million bushels and needs to average 99.439 million bushels per week to meet this crop year’s USDA estimate of 5 billion bushels. Stocks were 16.99 million barrels, down 1.8 percent from the previous week.

The crop progress report showed 73 percent of the corn is planted, compared with 65 percent one year ago and a five-year average of 76 percent. Emergence is at 34 percent versus 17 percent one year ago and a five-year average of 42 percent.

USDA’s export inspections report was bearish for corn at 41.7 million bushels versus the 43.9 million needed to keep pace with USDA projections of 1.9 billion. Corn export sales were estimated at 20 million bushels, which was above the 9.2 million needed to stay on pace with USDA’s estimate of 1.9 billion. The shipments came in at 45.6 million bushels, above the 44.2 million needed to keep pace with USDA projections.

Soybeans

As of the May 22 close, July soybeans were 53.75 cents higher for the week, while the November contract gained 49.25 cents. At 11 a.m. May 23, July soybeans were trading 4 cents lower, while November was down 9 cents.

Commercial buying supported the market on May 19, as soybeans opened the week with higher trade. New-crop contracts received support from some unwinding of bull spreads. The market was expecting planting progress to remain near the five-year average on the May 19 crop progress report. May 19 export inspections were bullish, coming in above the amount needed to keep pace with USDA’s projection.

Soybeans were trading higher early May 20 with follow-through buying providing support. The May 19 crop progress report showed planting a bit behind the five-year average at 33 percent, while emergence was at 9 percent, compared with the average of 11 percent. The strong trade through the first half of the session was followed by renewed commercial selling and a collapse into the close to finish with losses.

July soybeans closed at their highest level in three weeks on May 21 before setting yet another new closing high on May 22, following strong gains. Commercial buying of extremely tight old-crop supplies continued to support the market. New crop moved higher, as well, seeing a potential opportunity to buy acres in places where corn has not been planted yet. Exports have remained supportive, with another bullish round of export sales May 22, bringing the total for the year to 3 percent above USDA’s estimate. On May 22, USDA announced a sale of 120,000 metric tons of new-crop soybeans to China.

USDA reported soybean export inspections pace for the week ending May 16 at 6.2 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.538 billion bushels, compared with 1.26 billion for last year at this time. Soybean export sales pace was estimated at 22.6 million bushels (6 million for 2013 and 2014). Soybean export sales remain above USDA’s demand projection of 1.6 billion bushels. Shipments were reported at 7.5 million bushels.

Planting progress as of May 18 had 33 percent of the U.S. soybean crop planted, compared with 20 percent the previous week and the five-year average of 38 percent. Emergence was at 9 percent, compared with the five-year average of 11 percent.

Barley

As of May 18, 68 percent of the nation’s barley had been planted, compared with 55 percent the previous week and 69 percent for the five-year average. The barley emergence was estimated at 37 percent, compared with 29 percent the previous week and 40 percent for the five-year average.

USDA reported barley export shipments pace for the week ending May 16 at 65,910 bushels. Barley export sales estimate for the week ending May 16 was at a negative 300,000 bushels (South Korea cancellation).

May 22 cash feed barley bids in Minneapolis were at $3.95 per bushel, while malting bids were $6.

Durum

As of May 18, 14 percent of North Dakota’s durum crop was planted, compared with 1 percent the previous week and 41 percent for the five-year average. Emergence was estimated at 1 percent, compared with zero the previous week and 19 percent for the five-year average.

USDA reported durum export shipments pace for the week ending May 16 at 1.1 billion bushels, all going to Algeria. Durum export sales pace was estimated at 400,000 bushels.

May 22 cash bids for milling quality durum were at $7.10 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was $7.40.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending May 22 with $3.60 (Canadian) gains. Canola started the week with gains, but finished the week on the defense. Canola was supported by strong commercial buying. Planting delays and spillover buying from a sharply higher U.S. soybean complex added support. Canola broke away from the U.S. soybean complex May 22, trading lower from improving weather conditions. Warm, dry weather is allowing planters to get into the fields.

As of May 18, North Dakota producers had 13 percent of the state’s canola planted, compared with 2 percent the previous week and 44 percent for the five-year average.

May 22 cash canola bids in Velva, N.D., were at $21.37 per hundredweight.

Dry edible beans

As of May 18, North Dakota producers had 2 percent of their dry beans planted, compared with zero the previous week and 14 percent for the five-year average. Minnesota producers had 1 percent planted, compared with zero the previous week and 21 percent for the five-year average.

Sunflowers

As of May 18, 1 percent of the nation’s sunflower crop was planted, compared with zero the previous week and 6 percent for the five-year average.

USDA estimated soybean oil export sales pace for the week ending May 16 at 41.3 thousand metric tons. This brings the soybean oil export sales pace to 634.9 thousand metric tons, compared with 837.1 thousand metric tons for last year.

May 22 cash sunflower bids in Fargo, N.D., were at $21.35 per hundredweight.

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