Market News

Wheat supported by commercial demand

Soybeans were fractionally higher on short covering and technical buying, holding near multi-week highs in pretty quiet trade. The trade’s watching late development and early harvest weather, which looks generally non-threatening. China bought another 132,000 tons of 2017/18 U.S. beans and the weekly export numbers were neutral, strong for sales, relatively quiet for shipments. Soybean meal was higher and bean oil was lower, adjusting product spreads. With just a couple of weeks left in the 2016/17 marketing year for soybean products, bean and oil exports are just behind the pace set in 2015/16. Beans are also watching weather in South America, with dry parts of Brazil expected to receive at least some rainfall.

Corn was fractionally higher on short covering and technical buying, holding above last month’s lows, also in pretty quiet trade. Corn’s also watching the weather in the Midwest and Plains, with an eye towards the USDA’s October supply and demand report. Early anecdotal yields have varied widely and there’s some thought the USDA could lower the average yield estimate in this next set of numbers because of how dry August was in many key growing areas. Weekly export numbers were bearish, for both sales and shipments. Ethanol futures were lower. Ukraine has lowered its corn production estimate to 27 million tons, compared to the USDA’s most recent guess of 27.5 million, with the total grain crop projected at 61 million to 63 million tons. Missouri and Taiwan have agreed to an export deal for corn and dried distillers’ grains, along with soybeans. According to wire reports, China is expected to increase corn imports to meet Beijing’s new ethanol goals.

The wheat complex was modestly higher on commercial and technical buying. The overall supply outlook remains bearish, but there is that commercial interest near these price levels, with wheat seen as a good value. Forecasts have at least some rain in parts of the southwestern Plains, beneficial for the hard red winter crop. The trade is monitoring dry conditions in Australia as their crop emerges from dormancy. Those concerns recently pushed Australian wheat offers in Asia above U.S. prices, which could mean new demand for U.S. wheat. Recent lower trade in the dollar could also contribute to new U.S. export sales. The weekly export numbers for wheat were bearish with 2017/18 shipments behind the 2016/17 pace.