3 Big Things Today, June 9, 2021
1. Soybeans, Grains Decline in Overnight Trading
Soybeans and grains were lower overnight as traders take a breather after yesterday’s gains.
The U.S. Department of Agriculture is scheduled to release its monthly World Agricultural Supply and Demand Estimates (WASDE) report tomorrow.
Bean futures jumped almost 20¢ yesterday while new-crop corn finished up 7¢.
Investors this morning may be selling contracts and liquidating positions ahead of the report in case there are any surprises.
Also weighing on prices is a report from an oilseed processors group in Argentina that said soybean crushing in April hit a six-year high.
Still, the fundamentals are mostly unchanged with hot, dry weather hitting the U.S. Midwest and threatening lofty crop conditions.
Showers are forecast to diminish in parts of the eastern and southern Midwest and in the Delta heading into the weekend, though what rain falls will boost moisture ahead of further dryness next week, Commodity Weather Group said in a report.
Temperatures will remain in the upper 80s (°F.) and low 90s in much of the Corn Belt for at least the remainder of the week.
In North Dakota, South Dakota, and Minnesota, where drought has a firm foothold, temperatures will reach into the triple digits the next three days, which likely will add to crop stress, CWG said in its report.
Soybean futures for July delivery dropped 9¼¢ to $15.70 ¾ a bushel overnight on the Chicago Board of Trade. Soymeal lost $2.50 to $387.30 a short ton, while soy oil declined 0.67¢ to 71.41¢ a pound.
Corn futures for July delivery fell 6¢ to $6.74 a bushel.
Wheat futures for July delivery lost 6¾¢ to $6.78¼ a bushel, while Kansas City futures fell 7¢ to $6.25½ a bushel overnight.
2. Crop Prices Buoyed by Hot Weather, Tight Rapeseed Market, Commerzbank Says
Grain and oilseed prices have been buoyed in recent weeks by hot, dry weather in the U.S. Midwest, and a new report shows the rapeseed crop in France, formerly Europe’s biggest producer of the oilseed, will drop to a 20-year low, according to reports from Commerzbank.
About 72% of the U.S. corn crop was rated good or excellent condition as of Sunday, down from 76% a week earlier, the Agriculture Department said earlier this week.
Some 67% of soybeans earned top ratings, the first rating for the crop this year, but behind the 72% that was rated good or excellent during the same week last year, the USDA said.
Analysts polled by Reuters expected 74% of the crop to earn top ratings and 70% of soybeans to be in good or excellent condition.
“Nonetheless, the figures are by no means alarmingly bad,” Commerzbank’s Michaela Helbing-Kuhl said in a report. “In fact, the crops had been suffering from a lack of warm weather before the latest heat wave. May had been so cool that the development of the young plants had been delayed.
“What is more worrying is that longer-term weather forecasts also point to increased drought over the summer months, meaning that the crop condition risks deteriorating even further.”
The U.S. Drought Monitor is showing that the northern Plains are being hit the hardest so far this season by dry weather. A hair under 99% of North Dakota, the biggest producer of spring wheat in the U.S., is suffering from some sort of drought.
Almost 18% is seeing an “exceptional drought,” the worst-possible conditions, the monitor said.
Commerzbank said in a separate report that global rapeseed stockpiles are tight and that consumption likely will outweigh production for a second straight year.
The crop is a competing oilseed to soybeans.
“It was not least the two very poor EU crops that contributed to the deficits,” Helbing-Kuhl said. “This was the result of a significant reduction in acreage and a ban on a key group of pesticides, not to mention the weather. Production is now expected to rise because these pesticides have been approved again – with some limitations – in a number of countries.”
Still, acreage will rise only slightly this year and drop to 10% below the prior five-year average, the bank report said.
“And even this cautious estimate could still turn out to be overly optimistic” due to a drop in French production to below 3 million metric tons for the first time in 20 years, Helbing-Kuhl said. If realized, the crop would be down 9% from 2020-2021 and 32% below the prior five-year average, she said.
3. Storms May Bring Needed Rain to Parts of North Dakota
Thunderstorms are expected to fire up again tonight in parts of North Dakota, where it’s been extremely dry the past seven days, according to the National Weather Service.
Rainfall overnight will end this morning, but a line of storms will move east into eastern North Dakota tomorrow evening, the NWS said in a report early this morning.
Some storms may become severe with winds of more than 60 mph in the forecast, the agency said.
Farther south in parts of central Nebraska, heat indexes are expected to hit the triple digits tomorrow after a brief round of rainfall today. Thunderstorms are forecast for the area tomorrow into Friday, some of which may become severe.
In the southern Plains, meanwhile, temperatures are expected to top 105°F. this afternoon in parts of the Texas panhandle, the NWS said. A heat advisory has been issued for the area.
On the plus side, some storms may roll into the area starting Saturday, though severe weather will be limited, the agency said.