Market News

December corn notches new contract low

Soybeans were modestly higher on short covering and technical buying. Unknown destinations bought a total of 295,220 tons of U.S. beans, 11,200 for this marketing year and 284,000 for next, but there was a cancellation on 640,970 tons of old crop by China. The new marketing year for soybeans starts September 1st. Weather looks mostly non-threatening, but contracts were due for a bounce. Crop tour results generally look good, with results due out at the end of the week. Soybean meal futures were lower and bean oil was higher on the adjustment of product spreads. Bean oil had additional support from the Commerce Department’s plans to levy retroactive tariffs on biodiesel imports from Argentina and Indonesia. Celeres estimates Brazil’s 2018 soybean crop at 109.1 million tons, compared to the USDA’s most recent projection of 107.9 million.

Corn was modestly lower on speculative and technical selling, with December establishing a new low. Corn’s is also watching that generally non-threatening weather, which should be mostly beneficial for development. Yield estimates from an ongoing crop tour have varied, as expected, but it looks like this year’s crop could average out pretty well. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.052 million barrels per day, down 7,000 on the week, and stocks were 21.509 million barrels, a week to week decline of 319,000. Celeres projects Brazil’s 2018 corn crop at 95.8 million tons, compared to the USDA’s current guess of 93.4 million.

The wheat complex was mixed, with Chicago steady to firm, Kansas City weak, and Minneapolis mostly modestly higher. Contracts saw some new buying interest near the recent lows, but the overall fundamental outlook remains bearish. Recent rain has helped to recharge soil moisture in the southern Plains and eastern Midwest, while the northwestern Plains are expected to remain mostly dry. Japan is tendering for 133,791 tons of food wheat from the U.S. and Canada and Algeria is in the market for 50,000 tons of optional origin milling wheat. The USDA’s weekly export sales report is out Thursday at 8:30 AM Eastern/7:30 AM Central. Via Allendale, German farm co-op firm DBV expects that nation’s winter wheat crop to be 23.4 million tons, which, if realized, would be down 3% from a year ago.

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