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Published June 30, 2014, 09:24 AM

Soybeans stronger on demand

As of the June 26 close, July Minneapolis was down 11.5 cents, September Minneapolis was down 8 cents, July Chicago was 3 cents lower and July Kansas city gained 0.25 cents. Wheat futures were trading 5 to 10 cents higher the morning of June 27.

By: Ray Grabanski, Agweek

Wheat

As of the June 26 close, July Minneapolis was down 11.5 cents, September Minneapolis was down 8 cents, July Chicago was 3 cents lower and July Kansas city gained 0.25 cents. Wheat futures were trading 5 to 10 cents higher the morning of June 27.

Wheat contracts traded lower June 23 and 24, with spillover pressure from row crops, a firmer U.S. dollar and mostly favorable world wheat weather. As expected by traders, the June 23 crop progress report had little change in condition ratings for spring and winter wheat. Winter wheat’s condition rating was unchanged, while the spring wheat rating slipped 1 percent lower. The report showed winter wheat’s heading and harvest ahead of the five-year average, despite rains hindering the harvest. In spring wheat, emergence was ahead of the five-year average, while heading was lagging behind the average. June 23 export inspections were bullish coming in above the amount needed to keep pace with the U.S. Department of Agriculture’s projection.

Wheat closed mostly higher June 25 in slow, narrow trade as rain continues to slow the winter wheat harvest. Reported yields have been down as the crop first experienced extreme drought, then the present untimely rains hindering the harvest. Spring wheat is in good condition early, though fields are wet in the northern part of the country, with more rain in the forecast for the north-central portion of the U.S. Worldwide weather remains generally good for wheat.

Short covering ahead of the June 23 reports helped wheat close higher in nearby contracts on June 26. The average trade guess for wheat stocks is 597 million bushels, compared with 718 million last year. Trade expects all wheat acreage to come in just below the 55.8 million acres in the March report, while spring wheat acreage is expected to be at 11.9 million acres, compared with 12 million acres in the March report. June 26 export sales came in just below the amount needed to keep pace with USDA’s estimate, while shipments were above the amount needed.

As of June 22, 98 percent of the nation’s spring wheat crop was emerged, compared with 91 percent the previous week and 95 percent for the five-year average. Spring wheat headed was estimated at 10 percent, compared with the five-year average of 16 percent. Spring wheat crop conditions were at 71 percent good to excellent, 25 percent fair and 4 percent poor or very poor. Ninety-six percent of the nation’s winter wheat crop was headed, compared with 92 percent the previous week and 94 percent for the five-year average. Winter wheat was 33 percent harvested, compared with 16 percent the previous week and the five-year average of 31 percent. Winter wheat crop conditions were at 30 percent good to excellent, 26 percent fair and 44 percent poor or very poor.

Corn

The corn futures continued to move lower last week, with new crop production potential ahead of the USDA planted acreage and grain stocks report. Estimates for the report are that corn acres will be raised to 91.725 million versus USDA’s estimate of 91.691 million in March, while stocks are estimated at 3.722 billion bushels and 35 percent larger than one year ago. There are concerns there is too much water in areas around the U.S. As of the June 26 close, the July contract was down 10.5 cents for the week, while the December contract lost 8.75 cents.

Corn closed lower for the first three days of the week with the lack of buying interest. Traders were expecting the conditions to drop with too much rain and they did drop slightly from the previous week, but it is still the best rated crop since 1999 at this point in the growing season. Additional pressure came into the market with fund selling and estimates of large Chinese corn stocks. China also plans to increase its domestic grain reserves and expand storage. The weather looks to be drier and warmer, while the growing degree days appear to be tracking ahead of last year and the five-year average. There are also concerns that feed demand could slip lower through the year with fewer cattle and hogs.

The corn futures bounced higher on June 26, with the strength in the soybean trade. Additional support came from too much rain in the Northern Corn Belt and more forecast through the weekend. The export sales report was at the high end of estimates and above what is needed to stay on pace with USDA’s number. Short covering was also noted in this oversold market and some money going to the sidelines ahead of the June 23 report. Technically, the December futures are staying above the contract low of $4.35 made on Jan. 10.

Ethanol production for the week ending June 20 averaged 938,000 barrels per day, down 3.5 percent from the previous week. Total ethanol production for the week was 6.566 million barrels. Corn used in production the week ending June 20 is estimated at 98.49 million bushels and needs to average 104.466 million bushels per week to meet this crop year’s USDA estimate of 5.05 billion bushels. Stocks were 18.183 million barrels, up 1.87 percent from the previous week.

The crop progress report has corn rated at 74 percent good to excellent, 21 percent fair and 5 percent poor or very poor. Ratings were 65 percent, 27 percent and 8 percent, respectively, one year ago.

Soybeans

As of the June 26 close, July soybeans were 21.25 cents higher for the week, while the November contract gained 12.75 cents. At 11 a.m. June 27, July soybeans were trading 8 cents higher, while November was down 16.5 cents.

Soybeans opened the June 23 session higher, slipped lower into midday, and rallied into the close to finish with moderate gains. Support was in part a result of an unexpected expansion in China’s manufacturing index in June, which could be a sign that China’s economy is picking up again. The midday weakness was tied to losses in corn and bearish export inspections. The June 23 export inspections came in below the amount needed to keep pace with USDA’s projection.

Soybean trade was lower June 24, as the July-November spread continued to weaken, now down to $1.85. The June 23 crop progress report showed planting and emergence both ahead of the five-year average. The condition rating for soybeans was down 1 percent from the previous week to 72 percent good to excellent, but still well ahead of the 65 percent from a year ago. Soybeans were waiting for more direction from the quarterly stocks and acreage reports due June 30. The acreage report was expected to show record planted acreage for soybeans.

Soybeans traded higher June 25 and 26, as traders continued to position ahead of the quarterly stocks and acreage reports. The quarterly stocks report is expected to reinforce the tightness of old-crop stocks with pre-report estimates at 382 million bushels, compared with 435 million last year, both of which are historically tight numbers. The acreage report was expected to show record planted acres for new crop with the average estimate at 82.2 million acres, compared with 81.49 million in the March report and 76.5 million last year. Traders have been discussing the omission of 2013 prevent plant acreage in the March report, which could be a wild card on June 30. June 26 export sales were stronger than expected, at 11.7 million bushels for old crop.

Planting progress as of June 22 had 95 percent of the U.S. soybean crop planted, compared with 92 percent the previous week and the five-year average of 94 percent. Emergence was at 90 percent, compared with 83 percent the previous week and the five-year average of 87 percent. Conditions for soybeans were rated at 72 percent good to excellent, 23 percent fair and 5 percent poor or very poor.

Barley

As of June 22, 99 percent of the nation’s barley was emerged, compared with 92 percent the previous week and 95 percent for the five-year average. Barley headed was estimated at 17 percent, compared with the five-year average of 13 percent. Barley crop conditions were rated 67 percent good to excellent, 30 percent fair and 3 percent poor or very poor.

For the week ending June 26, cash feed barley bids in Minneapolis were down 20 cents to $3.30, while malting bids were at $5.60 per bushel.

Durum

As of June 22, 97 percent of North Dakota’s durum crop was planted, compared with 92 percent last year and 89 percent for the five-year average. Emergence was estimated at 87 percent, compared with 80 percent last year and 83 percent for the five-year average. Jointing was at 19 percent, compared with 14 percent last year and 35 percent for the five-year average. Durum crop conditions were rated 89 percent good to excellent, 10 percent fair and 1 percent poor or very poor.

For the week ending June 26, cash bids for milling quality durum were unchanged at $8.75 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was unchanged at $8.85.

Canola

For the week ending June 26, canola futures on the Winnipeg, Manitoba, exchange closed higher across the board with the front month July gaining $19.40 to $493.60 (Canadian). Spillover strength from Chicago Board of Trade soybean and soyoil futures combined with concerns about potential unplanted acres because of wet weather to provide support to canola futures throughout the week. Strength in the Canadian dollar was a limiting factor. Short covering ahead of the Statistics Canada report provided additional support, while the July contract saw a bit of volatility as it nears expiration.

As of June 22, 95 percent of North Dakota’s canola crop was emerged, compared with 63 percent last year and the five-year average of 85 percent. Blooming was at 11 percent, compared with zero last year and 12 percent for the five-year average. Canola crop conditions rated at 80 percent good to excellent, 19 percent fair and 1 percent poor or very poor.

For the week ending June 26, cash canola bids in Velva, N.D., increased 53 cents to $21.11 per hundredweight.

Dry edible beans

As of June 22, North Dakota producers (37 percent of the nation’s crop) had 96 percent of their dry beans planted, compared with 85 percent last year and 96 percent for the five-year average. Emergence was estimated at 87 percent, compared with 46 percent last year and 78 percent for the five-year average. Crop conditions were rated at 76 percent good to excellent, 19 percent fair and 5 percent poor or very poor. Nebraska producers (11 percent of nation’s crop) had 97 percent planted, compared with 97 percent last year and 95 percent for the five-year average. Emergence was estimated at 86 percent, compared with 78 percent last year and 71 percent for the five-year average. Crop conditions were rated at 75 percent good to excellent, 19 percent fair and 6 percent poor or very poor.

Sunflowers

As of June 22, 83 percent of the nation’s sunflower crop was planted, compared with 71 percent the previous week and 84 percent for the five-year average.

Soybean oil export sales pace for the week ending June 20 was estimated at 1.9 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 738.9 thousand metric tons, compared with 887.2 thousand metric tons for last year.

For the week ending June 26, soybean oil futures were 38 cents higher to $40.51. Cash sunflower bids in Fargo, N.D., increased 15 cents on the week to $21.85 per hundredweight.

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