Market News

Soybeans, corn pressured by expected harvest activity

Soybeans were modestly lower on fund and technical selling. Harvest is slower than average, but is expected to pick up steam with generally warmer, drier weather over the next few days. Good export and domestic demand was a loss limiting factor. Conditions in South America are mixed, too wet in some areas, too dry in others. It’s roughly the equivalent of mid-April in South America, but the potential growing season is longer in some areas. The USDA’s attaché in Buenos Aires recently released a report saying the office was leaving planted area estimates for Argentina unchanged, for now. Soybean meal was lower, following beans, and bean oil was nearly steady, consolidating.

Corn was modestly lower on fund and technical selling. Corn is also watching the mostly improved U.S. harvest weather and the mixed planting conditions in South America. The U.S. conditions should also allow the last 10% of the crop to fully reach maturity ahead of a widespread freeze. Unknown destinations bought 146,000 tons of U.S. corn and Mexico picked up 115,000 tons, with both for delivery this marketing year, and commercial demand did limit losses. The trade is also keeping an eye on NAFTA renegotiations, which are now expected to run through at least the first quarter of 2018. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. China sees 2017 grain production at a little more than 600 million tons, compared to the 2016 total of 616.2 million.

The wheat complex was mixed, with Chicago and Kansas City weak and Minneapolis firm. Winter planting is slow and there’s commercial interest at these price levels, but the overall fundamental outlook remains bearish. Minneapolis does have a comparatively better fundamental outlook, but it’s less bullish and more neutral. The trade has a lot of uncertainty about this year’s final winter wheat acreage total, with the next set of supply, demand, and production numbers out November 9th. The recent rainfall in winter wheat growing areas will mostly be beneficial as the crop heads towards dormancy. According to wire reports, new regulations covering perks for grain inspectors are delaying wheat shipments to Egypt, the world’s biggest buyer of the commodity. South Korea bought 69,000 tons of optional origin feed wheat and Japan is tendering for 123,736 tons of food wheat from the U.S., Australia, and Canada. Russia’s Ag Ministry pegs wheat production at 83 million tons, compared to their previous guess of 81.4 million and the current USDA estimate of 82 million.