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3 Big Things Today, June 13, 2022

Soybeans ease but hold near record high; Sizzling weather expected across much of the U.S.

1. Chicago soybean futures slide, but losses were limited

While the hot weather in the extended forecast is a positive for prices, the meltdown in the global stock market is viewed as negative, especially for soybeans, says Al Kluis, Kluis Commodity Advisors.

In the U.S. Globex grain markets at this hour, corn futures are 1 cent higher; soybean futures are down 19 cents, and wheat futures are trading 9 to 10 cents higher.   

On the Dalian Commodity Exchange in China, corn futures are 1 cent higher at $11.10. Soybean futures are 2 cents lower at $26.10. On the Matif exchange in Europe, wheat futures are 14 cents a bushel higher at $13.0.

In the overnight markets, the trading range for July corn is 12 cents with the last trade showing corn up 1 cent at $7.74.

The trading range for July soybeans is 35 cents; the last trade shows soybeans down 19 cents at $17.26.

Chicago wheat is up 9 cents, KC wheat futures are up 9 cents, and Minneapolis wheat is up 10 cents.

“I am watching the U.S. and global stock markets. For the Dow, the key level of support is the low from May 20 at 30,935; for the S&P 500, it is 3,807. Closing below support and at new lows for the year would be viewed as negative for the stock market and the entire commodity complex. A recession results in reduced demand,” Kluis says.

2. SMALLER SOYBEAN STOCKS FOR OLD, NEW CROPS, USDA SAYS

2021/2022 World Crop Production

The report pegged the 2021 Brazilian soybean production at 126.0 mmt vs. the USDA’s estimate last month of 125.0 mmt. and the trade’s expectation of 124.8 mmt. For corn, Brazil’s output is seen at 116.0 mmt. vs. the trade’s expectation of 114.6 mmt.

The soybean crop in Argentina was pegged at 43.4 mmt. vs. the trade’s expectation of 42.2 mmt. Argentina’s 2020/2021 corn crop is pegged at 53.0 mmt vs. the trade’s expectation of 52.2 mmt.

2021/2022 U.S. Ending Stocks

In its June 10 report, the USDA pegged the 2021/2022 projected ending stocks for corn at 1.485 billion bushels vs. the trade estimate of 1.438 billion bushels. The ending stocks for soybeans were 205 million bushels vs. the trade’s expectation of 217 million bushels. The USDA had the U.S. wheat ending stocks at 655 million bushels vs. the trade’s expectation of 661 million bushels.

2022/2023 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2022/2023 projected ending stocks at 1.400 billion bushels vs. the trade estimate of 1.337 billion bushels. For soybeans, the ending stocks were 280 million bushels vs. the trade that expected 295 million bushels today. The wheat ending stocks were at 627 million bushels vs. the trade’s expectation of 622 million. 

2021/2022 World Ending Stocks

The USDA pegged the world’s corn ending stocks at 210.9 mmt. vs. the trade’s expectation of 308.9 mmt. For soybeans, the world ending stocks are estimated at 86.2 mmt. vs. the trade’s expectation of 85.0 mmt. The world ending wheat stocks were 279.4 mmt. vs. the trade’s expectation of 278.9 mmt., according to the USDA.

2022/2023 World Ending Stocks

On Friday, the USDA pegged the world’s corn ending stocks at 310.4 mmt. vs. the trade’s expectation of 305.0 mmt. For soybeans, the world ending stocks are estimated at 100.5 mmt. vs. the trade’s expectation of 99.8 mmt. For wheat, the world ending stocks were 266.9 mmt. vs. the trade’s expectation of 267.6 mmt.

3. Excessive heat warnings, advisories across much of the U.S.

While a strong Pacific cold front is bringing cooler temperatures into the Southwest today, the heat will expand across the central and eastern United States. Look for record-breaking temperatures to extend north into the Central Plains and east from the middle of the Mississippi Valley to the Carolinas. 

As the front moves through the West on Tuesday, temperatures will become more tolerable across the Plains. However, the heat will continue to build ahead of the front, with temperatures well above normal from the Midwest to the Carolinas.

Scattered severe thunderstorms are expected to develop today across portions of the northern Plains, and from parts of the Midwest into the Great Lakes and the Ohio Valley.  Storms could produce large hail, damaging winds, and a few tornadoes. The threat of severe thunderstorms moves into the Upper Midwest, Northern Plains, and Mid-Atlantic on Tuesday as the strong cold front moves into the area.

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