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Grains and oilseeds bounce back
Soybeans were sharply higher on speculative and commercial buying. There may be rain and cooler temperatures in store for part of the Midwest but some damage has definitely been done. In any event, that rain may not be enough to fully break the drought. Soybean meal was sharply higher, following beans, and bean meal was up modestly with gains limited by product share spread adjustments. USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybean exports are pegged at 300,000 to 600,000 tons, meal is seen at 75,000 to 200,000 tons, and oil is placed at 10,000 to 40,000 tons.
Corn was higher on fund and commercial buying, along with spillover from beans. At this point, any change in weather won’t do that much good as a big chunk is either damaged or outright lost. There’s a good chance the crop will be far below 11 billion bushels and demand will have to be rationed further. The cash basis is showing signs of slowing domestic demand, and on the export front, Taiwan bought 60,000 tons of Brazilian corn. Ethanol futures were lower. Weekly U.S. corn sales, combined old and new crop, are expected to be between 100,000 and 300,000 tons.
The wheat complex was higher on commercial buying and spillover from corn, soybeans and the dollar. This year’s U.S. crop will be larger than last year, so most of the focus is on rising feed demand and the world crop weather problems. The Black Sea region in particular is seeing lower than expected yields. Ukraine’s Ag Ministry reports 80% of the grain area has been harvested at 18.34 million tons, compared to 25.15 million this time last year; winter wheat accounts for 11.98 million tons of the 2012 total with spring wheat at 100,300 tons. According to Russia’s Ag Ministry, 21.9% of the expected area has been harvested with the running total at 22.9 million tons, compared to 22.80 million this time last year, and harvest starting 10 days ahead of average. European wheat was up sharply on the U.S. weather outlook. South Korea bought 29,300 tons of U.S. wheat and 41,500 tons from Australia, while Jordan canceled a tender for 100,000 tons of wheat. In sell-buy-sell activity, Japan bought 42,600 tons of feed wheat. Weekly U.S. wheat sales are estimated at 300,000 to 600,000 tons.
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