Sun, June 16, 2024

Commodity Futures Mixed: Soybean Gains, Wheat Up 7%

soybean

Quick Look:

  • Despite weekly volatility, strong demand and tight supplies pushed July soybeans to $12.48 per bushel.
  • Global crop issues, especially in Russia and Ukraine, drove a 7% weekly increase in wheat futures.
  • July corn futures slightly increased to $4.64¾ per bushel, influenced by planting progress and soybean market weakness.
  • Soybeans remained lower post-holiday, with soymeal falling and soy oil gaining.
  • Soy export inspections rose 10.3% from the previous week but were 17.3% lower year-on-year, with China being the largest destination.

Soybean futures rose, bolstered by spillover support from increasing soymeal spot basis at export terminals, robust demand, and tight supplies. July soybeans closed at $12.48 per bushel, up 8¾ cents. Meanwhile, the July soy meal significantly rose, closing $9.80 higher at $386.50 per ton.

However, July soybean oil dipped by 0.24 cents, closing at 44.95 cents per pound. Despite these gains, soy ended the week with a decline of 18 cents, highlighting a volatile market sentiment influenced by bear spreading and sharp declines in soy meal during the overnight session.

Wheat Futures Up 7%, Kansas City Up 10½¢

Wheat futures resumed sharp rallies, driven by global crop problems in key regions such as Russia, Ukraine, France, the UK, and the EU. These issues led to a 7% increase over the week, although July and September Chicago contracts saw minor easing.

Chicago July wheat dropped ¾ cent to close at $6.97¼ per bushel. In contrast, Kansas City July wheat rose by 10½ cents to $7.21¼ per bushel, and Minneapolis July wheat increased by 8¾ cents to $7.52¾ per bushel. The CBOT wheat close was up by 3 cents, Kansas City wheat added 10 cents, and Minneapolis wheat climbed 4¾ cents.

Corn Futures Up ¾¢, Closes at $4.64¾ per Bushel

Corn futures slightly increased as traders monitored planting progress following rain delays and adjusted positions ahead of the holiday weekend. July corn futures increased by ¾ cent, closing at $4.64¾ per bushel. However, the market closed near the bottom of its range due to increased selling pressure from soybean weakness and a bearish reversal on the daily chart.

The corn market initially showed early strength, but this momentum faded as the wheat market declined. Increased selling pressure due to the weakness in soybeans resulted in corn closing near the bottom of its range, signalling a bearish reversal on the daily chart. Conversely, the soy market opened strong during the overnight session but closed with a bearish reversal, impacted by the sharp decline in soybean meal.

Post-Holiday: Soybeans Down 18½¢, Soymeal Drops $9.90

After the holiday weekend, soybeans remained in the red, with prices ranging from 2 to 18½ cents lower due to bear spreading. Soymeal led the losses, falling by $4 to $9.90 per ton, while soy oil exhibited strength, gaining 42 to 57 points on the day.

Regarding crop progress, the US soybean crop saw 68% planted, 5% ahead of the average, and 39% emerged, 3% ahead of normal. This progress indicates a relatively positive outlook for the upcoming harvest season.

Soybean Exports Up 10.3%, Down 17.3% YoY

Export inspections for 23rd May showed soybean shipments totalling 212,105 metric tons (7.8 million bushels), marking a 10.3% increase from the previous week but a 17.3% decrease from the same period last year. China was the largest destination, receiving 74,882 metric tons, followed by Egypt and Indonesia, with 36,124 and 30,043 metric tons, respectively. Cumulative exports amounted to 39.969 million metric tons (1.469 billion bushels), down 17.5% year-on-year.

Brazil Soy Harvest 91% Done, Argentina 78% Complete

In South America, Brazil’s soybean harvest in the Rio Grande do Sul region reached 91% completion, delayed by flooding. Meanwhile, Argentina’s harvest was reported to be 78% complete by the Buenos Aires Grain Exchange. An estimated production was 50.5 million metric tons, slightly above the USDA’s estimate.

This intricate web of factors highlights the complexity and interconnectedness of global agricultural markets. Local weather conditions, geopolitical developments, and international demand shape commodity prices. As these dynamics evolve, market participants remain vigilant, adjusting their strategies to navigate the uncertainties ahead.

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