- The morning session in Chicago has largely been one of consolidation. Soybeans have found strength on enlarged weekly export shipments to China, while corn and wheat flirt with either side of unchanged. This afternoon’s Crop Progress report will again be very WASDE-like in that the numbers are important to future production prospects. Following recent dryness there is a bit less certainty in predicting last week’s planting progress. The season’s first corn condition rating will be traded overnight at least briefly.
- US weekly export inspections through the week ending June 6 were better than expected in soybeans but uneventful for corn and wheat. Soybeans inspected for export last week totalled 26 million bu, vs. 19 million the prior week. Of this total, 14.8 million were inspected for loading to China. China continues to slowly chip away at its large outstanding sales total. There is nothing to suggest China won’t take a majority of its remaining 6.67 million mt of beans secured from the US.
- Weekly corn inspections totalled 33 million bu, vs. 29 million the prior week. An average pace of 45 million bu of corn inspections is needed to hit the USDA’s target. Wheat inspections totalled 17 million bu, vs. 22 million the prior week. For their respective marketing years to date, the US has shipped 1,582 million bu of corn, down 2% from this week a year ago; 1,284 million bu of soybeans, down 26% from last year; and 15 million bu of wheat, down 5%.
- China imported 7.36 million mt of soybeans in May, down 24% from a year ago and the lowest May import total since 2015. Tariffs and Swine Fever continue to weigh. We mention that China has been on a spree of buying from S America into early autumn, with larger monthly import totals forthcoming. However, cumulative Jan-May China soy imports are down a hefty 12%. Forward crush margins in China are slightly below breakeven.
- EU wheat futures settled €1.00-2.00/mt lower at new three-week lows, and in spite of a weaker €uro at midday. Saudi Arabia reportedly is testing Russian wheat quality for viability moving forward. The Western/Central European weather pattern also remains broadly favourable to wheat and early corn development. Heat expands into France, Germany and Poland, but above normal precipitation also continues there. Otherwise world cash wheat prices don’t seem concerned about soil moisture drying in June across E Ukraine and Southern Russia.
- Another 36 hours of complete Midwest dryness is expected before light precipitation returns to IA/MN. A broad NW upper air flow will be established Wed-Sat. This will funnel elevated rain chances into IA/MN and the Great Lakes through the period. Heavy accumulation of 1-2” is offered to NIL and WI. However, this pattern won’t be lasting. The GFS weather forecast has a poor track record beyond five days, but a more zonally flowing jet stream returns during the middle of next week. Heavy precipitation thereafter is centered on AR, MO, TN and KY, while only scattered showers impact IA, IL, IN and OH. Central US temperatures lean a bit cool, but major anomalies are not indicated.
- Crop progress this evening is key. Exactly how WASDE handles corn acres in Tuesday’s report is awaited, but we expect the market to dismiss US production forecasts after a few minutes. Weather and yield potential take over into late July.