Wheat market heats up
Wheat: winter wheat harvest continues The wheat markets traded moderately higher last week. For the week ending June 7, July Minneapolis gained 27.25 cents, September Minneapolis was up 20.75 cents, July Chicago was up 29.5 cents, September Chica...
Wheat: winter wheat harvest continues
The wheat markets traded moderately higher last week. For the week ending June 7, July Minneapolis gained 27.25 cents, September Minneapolis was up 20.75 cents, July Chicago was up 29.5 cents, September Chicago gained 27.25 cents, July Kansas City gained 31.5 cents, and September Kansas City was up 31.25 cents.
Wheat traded higher overnight and throughout the day before closing with moderate gains on June 4. Slowed farmer selling has led to renewed commercial interest. Strong gains in corn were supportive, as were continued concerns about weather conditions in the Black Sea region. Weakness in the U.S. dollar provided additional support. The June 4 export inspections were near expectations. This week's supply/demand update may show adjustments to old-crop exports and ending stocks.
Wheat trade was slightly higher overnight but turned lower by midday on June 5 on its way to moderate losses. The ongoing winter wheat harvest put pressure on the wheat market, though traders wonder about the yields. The weather forecast looks good for spring wheat, adding to the negative tone. The U.S. dollar turned stronger again, hindering noncommercial short-covering. Commercial buying provided some underlying support, but fundamentals are bearish longer term.
Wheat trade was higher on June 6 and 7, tied in part to strong gains in corn and soybeans. A warming trend in the Black Sea region supported wheat as forecasts were calling for above-average temperatures and below-average rainfall. The ongoing harvest in the U.S. limited the advance, with yield reports coming in mixed. The outside markets were generally supportive as the U.S. dollar was lower both days. The June 7 weekly export sales came in below expectations.
USDA reported export inspections pace for the week ending June 1 at 21.6 million bushels. This brings the year-to-date export shipments pace for wheat to 1.036 billion bushels compared with 1.27 billion bushels for last year. At the end of the marketing year, shipments have exceeded the U.S. Department of Agriculture's projection of 1 billion bushels. Wheat export sales pace for the week ending June 1 was estimated at 1.1 million bushels. This brings the year-to-date export sales pace for wheat to 1.026 billion bushels. At the end of the marketing year, this is on par with USDA's projected export sales pace of 1.025 billion bushels.
Corn: weather forecast, strong basis
The July corn contract created buying interest this week and gained 42 cents, while the December contract continued to be range bound and was up 20 cents as of the June 7 close. Old crop found buying interest last week from tight stocks, a strong basis and lack of farmer selling. While new crop traded sideways with an unchanged crop conditions report and a daily forecast that keeps changing for this week.
The July contract was able to work higher each day last week, gaining back the previous week's losses. Buying interest came back into the market with the talk of tight stocks. The basis remains firm and there is not much crop coming out of the bins. The outside markets were also supportive and another good ethanol report was also seen as positive.
New-crop contracts traded in a choppy fashion early last week. Traders were expecting a drop in crop conditions in the June 4 crop report. Instead conditions were left unchanged. The report also shifted 2 percent of the crop from good up to the excellent category. Brazil also raised its crop estimate by 1.89 million metric tons to a record 67.79 million metric tons. Rainfall for May has been about 50 percent of normal for the Corn Belt.
December corn closed with double-digit gains on June 7. The forecast took rain out of the six to 10 day forecast for the Midwest and central U.S., which brought buying interest back into the market. The weather in the 11 to 15 day is also hot and dry as the corn crop moves into early pollination. The weather in China is also being talked about and it is dry in the northern part of that country. Traders are also looking forward to the June 12 USDA supply/demand report and are expecting it to be friendly. Old-crop ending stocks are expected to drop by 25 million to 30 million bushels as compared with 851 million bushels estimated last month. New-crop ending stocks are expected to be 1.75 billion bushels and down from 1.881 billion bushels last month.
Ethanol production for the week ending June 1 averaged 904,000 barrels per day. This is up 0.22 percent versus the previous week and down 1.2 percent versus last year. Corn used in ethanol production for the week ending June 1 was estimated at 96.3 million bushels as compared with 93.3 million bushels necessary each week to reach USDA's estimate. Stocks were 21.188 million barrels, which was down 1.5 percent versus the previous week and up 7.8 percent versus last year.
USDA's export inspection report was bearish for corn. There were 27.1 million bushels of corn reported shipped and below the 36.2 million bushels needed to meet USDA's projection of 1.7 billion bushels. This was within the pre-report estimates of 25 million to 30 million bushels. The export sales report for corn was 15.7 million bushels, of which 9.9 million bushels was old crop and below 14 million bushels that was needed to meet USDA's projection of 1.7 billion bushels. This was below the estimates of 15.7 million to 31.5 million bushels and bearish for corn. Total shipments last week were at 28.9 million bushels and below the 37.1 million bushels needed last week.
Soybeans: strong gains
As of the June 7 close, July soybeans were up 83.75 cents last week and the November contract was up 83.25 cents. Soybeans were supported by concerns that this year's crop condition rating came out lower than last year's crop condition rating. Additional support was due to weather forecasts which have pulled rains out and put heat in.
Soybeans traded higher, but slipped throughout the day before closing with small losses on June 4. Continued concern about the slowdown in the Chinese economy pressured old-crop soybeans, but new-crop beans were able to close with moderate gains as weather continues to factor in the market. There are concerns that rain in the forecast will not be enough to overcome dry conditions in the Corn Belt and the Southern Plains. The U.S. dollar was weaker, providing additional support. USDA announced a sale of 165,000 metric tons of new-crop soybeans to China.
Soybeans returned to the right side of the ledger on June 5 due to continued weather issues. The near-term forecast is warm and dry, with more moisture in the longer term. The less than ideal conditions could have a negative impact on double-crop acres. Strong demand and tightening ending stocks supported as well. The U.S. dollar was firm, limiting the market's upside. USDA's first look at soybean crop conditions was on June 4. Conditions were estimated at 65 percent good to excellent compared with expectations of 69 percent, which was seen as supportive.
Soybeans traded higher on June 6 and 7, adding nearly 80 cents in two sessions. Weather questions persist as moisture was removed from the forecast on June 7. China cut its interest rate for the first time since 2008 on June 7, leading to aggressive fund buying. The U.S. dollar was lower both days. On June 6, USDA announced a sale of 120,000 metric tons of old-crop soybeans to China, and traders expect this week's USDA report to show tighter ending stocks due to strong export demand. The June 7 export sales report from USDA was below expectations.
USDA reported soybean export inspections pace for the week ending June 1 at 17 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.164 billion bushels compared with 1.398 billion bushels for last year at this time. Last week's soybean export sales pace was estimated at 8.1 million bushels. This brings the year-to-date export sales pace for soybeans to 1.336 billion bushels compared with 1.531 billion bushels last year at this time. With 13 weeks left in soybean's marketing year, shipments need to average 11.7 million bushels and sales have exceeded USDA's 1.315 billion bushels projection.
USDA reported no barley export inspections or sales for the week ending June 1. This brings barley's year-to-date export shipments pace to 6.37 million bushels compared with 5.5 million bushels last year.
Cash barley bids in Minneapolis increased slightly last week, putting feed barley bids at $5.25 per bushel while malting barley bids rose to $7.05.
Canola futures were higher last week in large part because of a nearly 80 cent jump in Chicago Board of Trade soybean futures on June 6 and 7. Firmer outside financial markets were supportive as well.
Cash canola old crop bids on June 7 in Velva, N.D., were at $28.10 per hundredweight, while new crop bids were $23.70.
USDA estimated durum export shipments pace for the week ending June 1 at 1.025 billion bushels with all of the bushels going to Algeria. Durum export sales pace for the week ending June 1 was estimated at 600,000 bushels.
Cash bids for milling quality durum were unchanged for the week at $7 per bushel in Berthold, N.D., while Dickinson, N.D.'s bid was 15 cents lower at $6.75.
As of June 3, 80 percent of North Dakota's sunflower crop was planted compared with 64 percent the previous week and 57 percent for the five-year average.
Soybean oil export sales pace for the week ending June 1 was estimated at 13.1 trillion metric tons, bringing the year-to-date total to 446.2 trillion metric tons, compared with last year's 1,216.9 trillion metric tons.
Cash sunflower old-crop bids on June 7 in Fargo, N.D., were at $25.25 per hundredweight while new-crop bids were $23.15.