Soybean Market Reacts to Trade Hopes, High Stocks, and Global Price Pressure

Wheat: All three Wheat markets closed higher last week, with the biggest gains in Chicago SRW as growing and harvesting conditions were very good. Strong yields are reported for crops in HRW and SRW areas. USDA on Monday said that planted area was 47.478 million acres and that the quarterly stocks were 851 million bushels. Both were a little above the average trade estimate. It is hot and dry to the south, but the north saw rains last week to support Spring Wheat development.

There are still reports that the weather has reduced production potential in Ukraine and Russia. Russia is forecasting a large reduction in Wheat production for the coming year. Winter crops in the Great Plains are reported to be in good condition, and Spring Wheat crops in the northern Great Plains and into Canada are generally in good condition.

Weekly Chicago Soft Red Winter Wheat Futures

Weekly Kansas City Hard Red Winter Wheat Futures

Weekly Minneapolis Hard Red Spring Wheat Futures

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Corn: Corn was higher last week on ideas that prices overall were ztoo cheap. USDA on Monday estimated planted area at 95.203 million acres, a high amount although less than the average trade expectation. The stocks were 4.464 billion bushels, slightly less than trade expectations. Variable heat and some showers are expected in the Midwest this week.

A severe drought is seen in central Nebraska and moderate drought extends east in a corridor into the Chicago area, but the drought area is shrinking. The rest of the Midwest has seen adequate or greater precipitation. Demand for Corn in world markets remains strong but has turned weaker in the last few weeks. Oats were higher on follow through buying seen in response to the StatsCan stocks and planted area reports last week and a weaker US Dollar.

Weekly Corn Futures

Weekly Oats Futures

Soybeans and Soybean Meal: Soybeans and Soybean Meal were higher last week on ideas that President Trump could make a major announcement about Chinese trade relations in his speech in Des Moines on Thursday night. Soybean Oil was lower. There was talk that the president will make a major announcement on Friday, and rumors say that it will be a new deal with China. Lower priced offers from Brazil in the world market are still important to the US price action. Soybean Meal was a little lower as the Trump administration is moving to curtail the use of Chinese used cooking oil and Brazilian tallow in the green fuel mixes for biofuels.

USDA said that the quarterly stocks were 1.008 billion bushels an that planted area was 83.380 million acres. The stocks were higher than expected and were bearish. Planting were roughly in line with trade expectations. Forecasts for good growing conditions in the Midwest and as cheaper prices reported from Brazil are still being heard, and the Midwest will turn warm and wet after hot conditions were reported over the weekend.

The soybeans market could remain under pressure as Brazil basis levels have been under pressure the last few weeks and prices in world markets for Brazil Soybeans are now less than those from the US. Export demand is in its seasonal doldrums. Export demand remains less for US Soybeans as China has been taking almost all the export from South America.

Weekly Chicago Soybeans Futures

Weekly Chicago Soybean Meal Futures

Rice: Rice was little changed on Thursday and lower for the week on follow through selling from the higher than expected planted area estimate from USDA and in part due to poor demand ideas for US Rice. USDA on Monday estimated Rice planted area at 2.647 million acres and Long Grain at 2.010 million acres. Weaker Asian prices are a drag on US futures, but the US trade depends much more on South American competition that has actually been offering less.

Chart trends are down on the daily charts. The cash market has been slow with mostly quiet domestic markets and average export demand. Milling quality of the Rice remains below industry standards and it takes more Rough Rice to create the grain for sale to stores and exporters. Rice has emerged in most growing areas now. Condition has been rated as good and the ratings by USDA are above last year.

Weekly Chicago Rice Futures

Palm Oil and Vegetable Oils: Palm Oil futures were higher last week on reports of stronger demand from India. Ideas that current increased production levels mean higher inventories in MPOB monthly data are still around. Canola was higher last week after trading in a big way on both sides of unchanged. Trends are mixed on the daily charts and on the weekly charts. The weather has generally been dry for planting and crop development in the Prairies with warm and dry weather around lately.

Weekly Malaysian Palm Oil Futures:

Weekly Chicago Soybean Oil Futures

Weekly Canola Futures

Cotton: Cotton was lower last week in choppy trading. here are still reports of better weather for planting in Texas and on demand concerns caused by the tariff wars and after USDA reported moderate to poor weekly export sales. Planting conditions remain good in Texas, but it is still too wet in the Delta and Southeast. It has been hot in most areas. Condition is rated behind last year. The monsoon in India is off to a good start and a good production there is possible.

Weekly US Cotton Futures

Frozen Concentrated Orange Juice and Citrus: Futures were lower last week and the July delivery month closed at new lows for the move on the daily charts. Trends are down. Development conditions are good in Florida now with daily rounds of showers. The poor production potential for the crops comes from weather but also the greening disease that has caused many Florida producers to lose trees. The weather so far this year is improved with scattered showers adding to soil moisture and helping with tree health.

Weekly FCOJ Futures

Coffee: New York closed lower and London closed higher on Thursday on reports of good growing conditions in most production regions of the world but especially in Brazil. New ork was lower for the week while London was higher. Prices have now been dropping for several weeks and are much more moderate than before as supplies available to the market have ticked up.

The Brazil Robusta harvest continues, and Indonesia continues to harvest. Vietnam is done with its harvest and domestic price were firm last week. The Brazil Arabica harvest is starting to expand and is expected to be less this year as news reports indicate that many cherries have fallen from the trees.

Weekly New York Arabica Coffee Futures

Weekly London Robusta Coffee Futures

Sugar: New York was higher and London closed lower last week as the weather remains generally good around the world for crops. Ideas of good supplies for the market continue and have been responsible for the recenzt price weakness. The South Center Brazil harvest is faster now amid drier conditions. Production in Centre-South Brazil has also been stronger than expected in recent weeks. Good growing conditions are reported in India and Thailand after a fast start to the Monsoon season.

The Monsoon has featured above average rains but recent rains have been less in India, especially in southern areas. Good rains are still reported in Thailand. Sugar prices in Brazil are now cheap enough that at least some refiners could increase ethanol production and cut back on Sugar production. Sugarcane used to produce sugar in the Center-South region of Brazil rose to 51.5% in the first half of June, up from 49.7% a year earlier.

Weekly New York World Raw Sugar Futures

Weekly London White Sugar Futures

Cocoa: New York and London were lower last week. There are still reports of increased production po-tential in other countries outside of West Africa, including Asia and Central America. The market antic-ipates good demand and less production from Ivory Coast and Ghana.

Pod counts for the mid crop sug-gested there is unlikely to be a significant recovery in production this season, and current weather is has seen increased rain for the crops for the coming crop. Adequate soil moisture in Ivory Coast is fos-tering abundant flowering on trees, signaling a healthy October-to-March main crop despite mainly be-low-average rain in most of the main growing regions last week

Weekly New York Cocoa Futures

Weekly London Cocoa Futures

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(Featured image by James Baltz via Unsplash)

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