Market News

Commercial demand supports grain, oilseed futures

Soybeans were modestly higher on commercial and technical buying. Most forecasts have another round of harvest delaying rain in parts of the Midwest and Plains this weekend into early next week. Conditions for most of this week have been good in many areas, so next week’s report is expected to show solid progress. Weekly export sales were bullish, however, shipments were bearish, and China bought 384,000 tons of 2017/18 U.S. beans Thursday morning. Soybean meal was mixed, consolidating, and bean oil was up. According to wire reports, Informa Economics sees 2018 U.S. soybean acreage at 90.347 million acres, compared to September’s projection of 89.057 million. Planting weather in South America continues to look mixed, too wet in some areas, too dry in others. A significant delay in soybean planting in Brazil would push back their second corn crop, the larger of their two production cycles.

Corn was fractionally higher on commercial and technical buying. Corn’s also watching harvest activity ahead of that expected rain event. Corn’s also anticipating a good week to week increase in the U.S. harvest pace next week. Corn’s also watching planting conditions in South America, especially in Brazil. The USDA’s attaché estimates 2016/17 production in Brazil at a record 97.7 million tons, with record exports of 35 million tons, and sees 2017/18 at 95 million tons. Weekly export numbers were neutral to bearish overall. Ethanol futures were lower as White House policy regarding the RFS remains uncertain. Informa sees 2018 U.S. corn acreage at 90.460 million acres, compared to the last guess of 97.880 million. The USDA’s attaché in Ukraine says 31% of that nation’s corn crop is harvested as of October 10th, and the office expects Ukraine to remain an active exporter of corn. Allendale says China sold 92,388 tons of 2013 corn from state reserves.

The wheat complex was modestly higher on commercial and technical buying. The fundamentals are bearish, but there’s at least some buying interest at these prices. Rain in the Plains and Midwest will be beneficial as the U.S. winter crop heads towards dormancy. Japan bought 64,658 tons of U.S. food wheat, along with 34,928 tons from Canada and 24,150 tons from Australia, and Israel purchased 10,000 tons of Black Sea origin feed wheat. Egypt is tendering for an unspecified amount of wheat, most, if not all, will probably come from Russia. The USDA’s attaché in Brazil has 2017/18 wheat production at 5.15 million tons, down 23% from 2016/17, citing a mid-season frost and dry weather.