Soybeans Bearish news: USDA soybean production estimates 3.3 billion bushels. Soybean ending stocks are expected to reach 179 million bushels. World ending stocks are anticipated at 66 million tons. Eighty-four percent of soybeans are planted, 66 percent emerged, and 75 five percent rates good to excellent.
Rumor: China cancelled 10 shiploads of South American soybeans and two shiploads from the United States. Rumors that China may shift contracts to later dates abound. Their port facilities are crowded with imported beans; they have no place to hold them. Chinese soybean crush margins are thin.
Only half of the South American soybean crop has been sold. Weekly Export Sales for the United States 148 million tons were far below market expectations. Shipments were also bearishly low at 149,000 tons.
Bullish news: Farmer selling remains light not only in the United States but also Argentina. Old crop soybean supplies are tight supporting July prices. The biodiesel tax incentive, $1/gallon, will probably pass the Senate.
Corn Bullish news: USDA corn production estimates 13.3 billion bushels. Ending stocks in the United States 1.7 billion bushels. Yield estimates are early but so is the crop. The current estimate is below 160 bushels per acre. The yield last year went over 164 bushels.
China is expected to import more corn, probably from the United States. Shipments did exceed a million tons.
Bearish news: Corn prices sank to an eight-month low this week. Production favorable weather is price bearish. Production potential continues to burden prices here and in Asia. Ninety-four percent of corn is emerged. Seventy-six percent of corn rates good to excellent. Trader selling dominates the market.
Weekly corn exports of 315,000 tons were significantly below market anticipation which was near a million tons. World corn production estimates increased to 835 million tons. World ending stocks will hit 154 million tons. Export inspections of 32 million bushels are down 36 percent in one week.
China continues to sell corn out of stored reserves into domestic markets to keep down food inflation. India has a similar policy on grains. These government policies keep the price of grain lower on world markets.
Wheat Bearish news: Wheat production in the United States will be over two billion bushels according to USDA estimates. The U.S. carryover would then reach nearly a billion bushels. World carryover estimates are a heavy 198 million tons. Current world supplies are projected to be 676 million tons.
The weakness of European currency (the euro) makes wheat in Europe much cheaper for nations to import than United States wheat because the dollar has gain value relative to the Euro. Asian wheat supplies remain abundant. Freight is also a factor favoring Eurasian wheat in Africa, Asia and Europe.
Weekly export sales were down another 20 percent at 294,000 tons. That number is 53,000 tons below last week’s export sales. Export sales are behind USDA predictions. Wheat in the United States rates eighty-four percent good to excellent. Export inspections of 14 million bushels are below USDA estimates.
Australia has a bumper wheat crop of 22 million tons but Australian exports are down thirty-five percent from last year. As monsoons continue, India is expected to resume wheat exports. India is estimated to have 35 million tons of wheat in storage. The government target is 4 million tons. Russian wheat exports are up 27 percent.
Bullish news: Wheat prices are less volatile than beans, corn or rice. Crop condition ratings are good. Quality is apparently high.
Rice Bearish news: U.S. prices went limit down this week. Expect prices to dip below $10. World rice prices are falling due to inexpensive Asian rice from Thailand and Vietnam. U.S. rice export sales were down 23,000 tons from last week. International prices are weakening. India has 25,000 tons of rice in storage. Their Government target is 12,000.
Bullish news: Weekly rice export sales were 45,000 tons which is high for this time of year. Brazil bought another 54,000 tons of rice for delivery next year. Rice shipments of 78,000 tons were stronger than expected.
Cotton Bullish news: Cotton is oversold. Factory orders increased last month for the first time since this recession started. Weekly cotton export sales 422,000 bales were greater than markets expected.
Texas weather has turned dry. The weather forecast is unfavorable for production which makes it favorable for prices. Given the fundamentals of tight supply, any adverse weather should provide a price premium.
Bearish news: Unemployment in the United States remains high. Economic weakness in Europe and inflation fighting in policies in Asia are limiting cotton prices. Ninety-one percent of cotton is planted, 8 percent is squaring and 66 percent rates good to excellent. Traders are selling cotton.
Cotton technical charts show prices have remained below the 100-day moving average for most of the week. December prices recently joined July prices dipping below the 100 day moving average. Cotton prices are down eight cents from the May 19 high.