Corn ended the day mixed on conflicting weather models surrounding rainfall in parched areas of the Corn Belt. Futures spent a good portion of the morning firmer before selling off late in the session. A USDA flash sales announcement at 8am of 153,416 metric tons of corn to unknown destinations for the 21/22 marketing year and concerns that May and June are shaping up to be drier than 2012 offered support. Currently the EU weather model looks drier than the GFS for IA & IL. Rain is desperately needed in the coming days- particularly in the western and northern states. Traders also continue to monitor Brazil’s corn crop, as dry conditions have resulted in decreasing production estimates. Proof of the smaller crop is being seen in the country’s import pace, as Brazil is already making small imports of corn from other S. American producers (mainly Argentina and Paraguay). Thus far, Brazil has imported 70% more corn than a year ago at this time. In addition, Brazil has approved the import of GMO corn from the U.S. This morning’s weekly EIA report came in mostly as expected. U.S. ethanol production decreased slightly (3.9%) from the previous week’s output but was still just over 21% more than year ago production. Ethanol inventories rose for the 3rd consecutive week. Approximately 105 mln. bu. of corn was estimated to have been used in last week’s production. Weekly export sales will be released tomorrow morning.
Soybeans
Soybeans finished the session weaker today. Speculation that the Biden Administration may extend aid to oil refineries seeking to avoid clean fuel mandates weighed heavily on soyoil today and spilled over into beans. Thoughts that the global oilseed market is top heavy was also viewed as negative. NOPA soybean crush was also somewhat disappointing on Tuesday, as the month of May marked the 4th consecutive month that crush fell below the average trade estimate. A total of 163.5 mln. bu. of beans was crushed in the month. This was an increase from April, but well below the 169.6 mln. bu. in May 2020. Soy oil stocks were also less than expected. The lower crush total was mostly attributed to extended maintenance at some plants due to low old crop bean inventory. Old crop soybean export interest has been light with Brazilian offers below the U.S. Weak Chinese crush margins are also limiting interest for new crop. Weekly export sales will be out tomorrow morning.
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