Analysis: Profit taking and weather concerns drag Soybeans, Corn, and Wheat lower

Soybean prices were lower due to profit taking and technical selling, compounded by a lack of follow-through buying after an initially strong start.

Wet forecasts for key U.S. growing areas are delaying planting activities, leading to early discussions about some producers possibly switching to soybeans from corn, although no firm decisions have been made yet.

Unknown destinations purchased 180,000 tons of U.S. soybeans, with 120,000 tons for the 2023/24 season and 60,000 tons for 2024/25.

If these buyers include China, it could indicate potential retaliation for new U.S. tariffs, or a hedge against uncertainties regarding Brazil’s crop size following heavy flooding in Rio Grande do Sul.

Corn faces planting delays and overbought conditions

Corn prices also declined due to profit taking and technical selling, failing to maintain early session gains.

The market is closely monitoring widespread planting delays in the Corn Belt, as well as second crop stress in Brazil caused by hot, dry conditions.

In Argentina, a drier weather pattern is expected to expedite the harvest, but cooler temperatures and frost could damage later-planted crops.

The USDA’s next supply, demand, and production report is due on June 12th, with Brazil’s CONAB updating its outlook on the 13th.

U.S. ethanol production averaged 1 million barrels per day last week, an increase of 35,000 barrels from the previous week and 13,000 from last year, indicating steady demand for corn for ethanol use.

Wheat prices fall despite dollar weakness

Wheat prices fell due to profit taking and technical selling, despite a significant drop in the dollar.

Ongoing weather issues continue to affect the market, including freeze damage in Russia and dry conditions in the Black Sea region and parts of the U.S. Plains.

Excess moisture is a concern for western Europe and the soft red winter wheat crop in the eastern Midwest, Delta, and southeast.

In South America, flooding is causing planting delays in Brazil, while India’s new crop domestic wheat procurement is 25.4 million tons, 1.6% below last year’s levels.

There is speculation that India may need to import wheat to control domestic prices, especially after state sales reduced reserves.

SovEcon has lowered its outlook for Russia’s wheat crop to 85.7 million tons, nearly 4 million tons less than previous estimates due to freeze damage.

USDA and CONAB reports in focus

Upcoming reports from the USDA and CONAB will be critical for market participants as they navigate these challenging conditions.

The USDA’s weekly sales numbers are expected to provide further insights, while Brazil’s ANEC has projected May soybean exports at 14.13 million tons, up from 13.21 million.

These updates, along with evolving weather patterns and export data, will shape market dynamics in the weeks ahead.

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