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Soybean Oil Impact:
Soybean futures climbed throughout the day on the Chicago exchange, supported by rising soybean oil prices. Terry Reilly of Marex said "soybean oil is getting support from this week's rally in US crude oil (WTI) prices." He added that the grain market was largely stable, supported by favourable weather boosting crop growth at the start of summer, while traders showed little interest in corn futures. Soybean oil futures ended the session up 1.2% at 46.92 cents a pound.
Rainy Days:
Rainfall across the eastern Corn Belt trimmed early gains in grain markets. The US Department of Agriculture (USDA) expects abundant rain in growing regions for the rest of the week, easing traders' concerns over crop conditions. Joel Karlin of Ocean State Research said: "At this time of year, rain makes grain, and most of the Midwest is expected to receive good moisture over the coming week." A 0.6% rise in the US dollar index also weighed on prices.
Not Quite Excellent:
Despite rapid planting progress, crop conditions are not as good as last year's, according to the latest crop progress report. The USDA said corn conditions improved from the previous week, with 69% rated good or excellent — up one point from last week but down six points from the same time last year. Spring wheat rated good or excellent stood at 50%, up five points from last week but still 24 points below last year. Monday's report was the first to include soybean crop ratings, with 67% rated good or excellent.
A Chance To Correct:
Ahead of Tuesday, soybean futures had closed lower in four of the last six sessions, setting up an opportunity for a rebound, according to Tom Fritzenmeyer of Summit Commodity Brokerage. He said: "Soybeans are seeing a modest improvement this morning after the market became oversold and is poised for an upward correction." However, he noted that the longer-term crop outlook is not favourable. He added: "Momentum and trend indicators point lower, and with little concern currently over crop development, there is not much incentive for investment funds to keep buying soybeans."
State-Level Deals:
Companies representing Iowa corn growers signed an agreement this week with representatives of Vietnam's agricultural sector. The Iowa Corn Growers Association said five memoranda of understanding were signed, two of which focused specifically on corn and ethanol. The deals include the export of 900,000 metric tonnes of corn to Vietnam, along with 250,000 tonnes of distillers dried grains with solubles (DDGS), used as animal feed. The association added that the Vietnamese government "is currently studying" expanding the use of E5 fuel to cover all petrol grades, which could raise the blending rate to 10% and increase demand for US ethanol by 200 million gallons.
Source: Morningstar