Market News

Quiet session ends in positive territory

Soybeans were modestly higher on short covering and technical buying. Unknown bought 1,080,00 of U.S. beans, 960,000 for this marketing year and 120,000 for next marketing year, and China purchased 132,000 tons. The USDA’s weekly numbers are out Thursday morning. Realistically, the gains were less of a function of that demand and more “path of least resistance” activity. Development and harvest weather is generally expected to be non-threatening in most of the Midwest and Plains. The USDA could lower the average yield estimate after a relatively dry August in many key U.S. growing areas. Soybean meal and oil were higher, following beans. The trade is also watching crop weather in South America, with parts of Brazil expected to see much needed rain next week.

Corn was modestly higher on short covering and technical buying. Corn’s also watching the weather, expecting mostly warm and generally dry conditions over the near term. Early anecdotal yield reports have varied widely with new supply, demand, and production numbers out October 12th. Quarterly grain stocks numbers are out on September 28th. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.033 million barrels per day, down 14,000 on the week. That’s the 12th week in a row with production topping a million barrels a day. Stocks were 21.138 million barrels, 6,000 higher. The USDA’s attaché in Egypt estimates 2017/18 corn imports at 8.8 million tons, compared to 8.7 million in 2016/17. The attaché for Mexico estimates 2017/18 corn production at 26 million tons, compared to 27.565 million last year, with imports of 15.5 million, compared to 14.2 million in 2016/17. The U.S. is expected to provide most of that imported corn.

The wheat complex was modestly higher on short covering and technical buying. At current price levels, contracts are seen as a good value, but the overall fundamental outlook is bearish, especially on the global supply side of the ledger. Conditions generally look good for winter wheat planting activity. Egypt bought 175,000 tons of wheat from Russia. The USDA’s attaché in Cairo expects 2017/18 wheat imports to be 11.7 million tons, compared to 11.4 million in 2016/17, with 2017/18 domestic production of 8.1 million tons. The USDA’s attaché in Mexico sees 2017/18 domestic wheat production at 3.5 million tons.