The spot July soybean contract was trading above the $15 per bushel mark as recently as April 18th before plunging below $13/bu yesterday; values are recovering today despite the overall lack of fundamental help at this point. We opened this week with a decent amount of confidence that the overall weather trend would start to change, but June 1 has arrived and concrete evidence of that has yet to show its face. Scattered chances continue to reach into the belt this week, but action is being held in the southern Plains going forward.
Rains continue in the SW Midwest and southern Plains over the past 24 hours, creeping just a bit into the heart of the belt with some scattered rains in MO and southern IA, including central IA this morning. The pattern remains through the weekend, heaviest in the central and southern Plains with lighter numbers in the northern Plains/NW belt, again creeping into the central/ northern Midwest. Extended forecasts keep the pattern intact, with heavy rains holding out to the west and the bulk of the belt dry. Temperatures remain warm into the 6–10-day period, back closer to normal for the 11-15 day.
The state of the global economy is a perpetual factor in commodity trade but is starting to be more of an issue for world trade. Several countries are seeing reduced commodity demand as consumers have started to change their buying habits. We are now starting to see more issues with importer credit and available cash to cover purchases. One worth noting is Egypt who recently told sellers they would be delaying payment for purchases until later in the year. This is going to be more of a problem for developing countries who do not have credit to start with. The rally we are starting to see due to global weather concerns is making the lack of buying power even more of a concern for importers. While not an economic concern we are also seeing some import buyers show concern over tightening supplies, mainly of wheat. The potential closure of the Black Sea corridor in July is elevating these worries. The combination of these factors is driving buyers to sources with the lowest offers, which heavily favors South America over the US on corn and soybeans. This is also keeping buyers sourcing wheat from Russia and the EU. The debt ceiling passed the House overnight and is now on its way to the Senate for a vote. This along with the possibility of a pause in interest rate hikes supported the markets overnight.
Have a great day!