3 Big Things Today, May 25
1. Wheat Rises Overnight on Russian Growing Woes, Soybeans Higher
Wheat futures rose overnight as a Russian consultancy cut its forecast for the country’s crop, along with signs of global demand.
Russia’s SovEcon cut its production estimate to 77 million metric tons from 78.2 million tons yesterday due to adverse weather in some growing areas.
A separate group, UkrAgroConsult, said the pace of spring-wheat sowing in Russia is the slowest in five years. On the demand side, however, exports from the country continue at a record pace, the group said, and while it’s not U.S. sales, it shows that there is global demand for the grain.
Algeria bought almost 700,000 metric tons of wheat on Wednesday for shipment this August, though it’s unclear from where they purchased the grain.
Soybeans were higher amid optimism that China will buy more soybeans. Reports surfaced this week saying the country’s government instructed state buyers to purchase beans from the U.S. in a bid to further lighten trade concerns.
Wheat for July delivery gained 7¼¢ to $5.37½ a bushel overnight on the Chicago Board of Trade while Kansas City futures rose 8½¢ to $5.57½ a bushel.
Soybean futures for July delivery rose 6¢ to $10.41¾ a bushel overnight. Soymeal futures gained $1.70 to $379 a short ton and soy oil fell 0.10¢ to 31.61¢ a pound.
Corn futures added 1¾¢ to $4.06 a bushel overnight.
2. Soybean Exports a Net Negative as China Still Absent From Buyer List
It was a rough week for soybean exporters as sales were a net negative in the seven days that ended on May 17 and China has yet to resurface as a buyer.
Exporters reported that cancellations of old-crop cargoes to overseas buyers outpaced new purchases by 139,500 metric tons, according to the U.S. Department of Agriculture.
Pakistan was the biggest buyer at 248,000 metric tons, followed by Bangladesh at 173,100 tons, Indonesia at 81,800 tons, Germany at 75,200 tons, and the Netherlands, which took 66,000 tons, the USDA said in a report.
An unknown buyer canceled a shipment for 894,500 tons, however, and China declined a purchase for 52,500 tons, accounting for the net reduction in sales last week.
For 2018-2019, net sales totaled 6,900 metric tons, the agency said.
Old-crop corn sales were more positive as exporters sold 854,300 metric tons last week, according to the USDA. That’s still down 13% from the previous week but up 3% from the prior four-week average.
Japan was the biggest buyer, purchasing 326,900 metric tons, followed by South Korea, which was in for 223,300 tons, and Mexico, which bought 150,800 tons of corn. China bought 88,200 tons and Vietnam purchased 68,900 tons.
Still, an unknown buyer canceled a purchase for 318,400 tons.
For 2018-2019, sales totaled 273,400 tons as Japan bought 188,000 tons and Vietnam took 60,000 tons, the USDA said.
Wheat sales for the 2017-2018 marketing year that ends on May 31 totaled 112,300 metric tons, up 78% week-to-week but down 29% from the prior average.
South Korea was in for 75,200 tons, Guatemala bought 22,000 tons, Ghana took 18,500 tons, Nigeria purchased 13,700 tons, and El Salvador was in for 8,200 tons. An unknown customer canceled a shipment for 32,300 tons.
New-crop sales totaled 340,000 tons as Taiwan took 85,800 tons, Japan bought 55,400 tons, and Iraq purchased 50,000 tons, the USDA said.
3. Thunderstorms Expected Today in Parts of Southern Plains, Northern Midwest
Thunderstorms are possible across the eastern Oklahoma and Texas panhandles this afternoon, which could become strong or marginally severe, according to the National Weather Service.
Large hail and damaging winds are the main threats, the NWS said in a report early Friday morning. The storms likely will spark up again on Sunday and go through Wednesday, with some again turning severe, the agency said.
Farther north, more storms are expected in parts of southeastern South Dakota, southwestern Minnesota, and northeastern Iowa, according to weather maps.
“Isolated to scattered storms may develop in the mid to late afternoon, primarily in areas from east-central South Dakota, into southwest Minnesota, and the Iowa Great Lakes,” the NWS said. “The risk of severe weather is low, but the strongest storms may produce wind gusts to 60 mph along with small hail.”