Market News

Soybeans, corn lower, back to watching weather

Soybeans were sharply lower on commercial and technical selling, with the most active contracts posting big week to week losses and November hitting a new nine year low. The USDA raised its U.S. production estimate Thursday and if crop ratings hold at roughly these levels, that number will likely go higher. The supply and demand numbers also reflect the expected impact of Chinese tariffs on U.S. beans. That said – some of the slack on exports is being picked up by other nations that don’t have a tariff on U.S. beans. Both China’s Ag Ministry and the USDA expects China to buy fewer beans next marketing year, the first decline in 15 years. Soybean meal and oil followed beans lower on the implications of another large U.S. crop with demand uncertainties. According to AgriCensus, Brazil’s Congress has legislated minimum freight rates, which could raise export and consumer goods costs, but would limit the impact of rising diesel prices on truckers. A recent labor stoppage by truckers paralyzed interior and some export movement. The bill would also have to pass Brazil’s Senate and be signed by President Temer.

Corn was lower on profit taking and technical selling, giving back most of Thursday’s gains, with the most active nearby contracts losing nearly $.20 on the week. Corn was also watching the weather, with cooler, wetter conditions expected in many areas in the early part of the week. That’ll help the dry parts of the Midwest but could cause some damage to areas that are already wetter than normal. Still, at this point, the trade does expect a very large crop this year. Part of the tariff related export uncertainties will be alleviated by solid feed and fuel demand expectations. The next set of supply, demand, and production numbers is due August 10th. July Chicago grain and oilseed contracts expired Friday. Ethanol futures were lower. The Buenos Aires Grain Exchange says drought could lower Argentina’s corn production total even further. Consultancy AgRural raised its outlook for Brazil’s second corn crop, up to 57.1 million tons, with 25% of the crop harvested.

The wheat complex was mixed, mostly higher, but the three main U.S. pits till posted significant week to week losses. Chicago and Kansas City were supported by commercial demand, along with the USDA’s tighter new crop world ending stocks estimate and lower global production projection. The trade will continue to monitor conditions in North America, the Black Sea region, the European Union, and Australia. Minneapolis was mostly firm, with the U.S. spring crop in very good condition. The USDA’s Commodity Credit Corporation bought 33,780 tons of U.S. hard red winter for distribution in Ethiopia. The Rosario Grain Exchange estimates 2018/19 wheat production in Argentina at 20 million tons, which would be a new record, if realized.