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Soybeans are higher on trade talk optimism, but corn and wheat are really feeling the weight of good US growing/planting conditions. With planting conditions so good, some traders are speculating that we might see more corn acres at the expense of soybean acres.
US President Trump announced a trade deal with the United Kingdom, the first by the US with a country whose imports were subject to new tariffs imposed in early April. The general US tariff rate on UK goods is set at 10%. Trump said the "breakthrough" agreement will boost US export markets for agricultural products, including beef and ethanol. Details to be finalized in coming weeks.
Thursday's USDA Export Sales Report showed 65.5 million bushels of corn, 13.8 million bushels soybeans, and 2.6 million bushels of wheat were sold for export during the week ending May 1. Corn export sales exceeded the high end of trade estimates by 10 million bushels. Soybeans and wheat were within trade estimates. Top destinations for U.S. corn this week are Japan & Taiwan. Mexico & Taiwan were top buyers of U.S. soybeans. Marketing year to date corn export sales exceed the seasonal pace needed to hit USDA's target by 156 million bushels, up from 115 million bushels the previous year. Marketing year to date soybean export sales exceed the seasonal pace needed to hit USDA's target by 32 million bushels, down from 34 million bushels the previous week. Additionally, todays export sales included 205,000 tonnes of corn to Mexico, 115,000 tonnes of corn to unknown, and 225,000 tonnes of soybeans to Pakistan.
Continued beneficial rains across the Southern Plains have reduced the portion of the U.S. winter wheat crop experiencing some level of drought to 22% according to this morning’s update, down sharply from 37% at the start of April. This has coincided with a solid improvement to U.S. winter wheat conditions, with this week’s 51% good/excellent marking the highest reading for the comparable week in five years. The improved prospects for the U.S. winter wheat crop, as well as similar recent improvements in the Black Sea region, have weighed heavily on the wheat market.
Statistics Canada release their stocks report today for March 31st which showed total stocks of wheat, canola, oats, corn and barley were all down, while stocks of soybeans increased, compared with the same period in 2024.
I retweeted this tweet from Market Minute LLC on Twitter, but wanted to share it here as well to give everyone something to think about. See chart below.
"What does a weather scare rally typically look like? Here is an example of this for corn in 2023. Planting was fast. We continued lower until May 18th before finding a bottom (would be next weekend). After we saw a month long rally topping out on June 21st. However the “real rally” only lasted 7 days. As from June 12th to June 21st we saw +$0.90 of the $1.30 rally. Just 9 days later on June 30th we gave back the entire rally plus some. Falling from $6.30 to $4.80 in the blink of an eye. Unless it’s a real material drought like 2012 (odds aren’t high) chances are the rally doesn’t last too long. The point is.. if we do get a weather rally opportunity you need to be prepared. As a supply driven rally can vanish fast.
Funds were thought to have been all sellers.
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