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Soybeans rally from recent lows

Soybeans were higher on short covering and technical buying. Contracts saw a bounce after the recent move to new lows, with no real fundamental backing. Near-term weather in most of the Midwest is seen as non-threatening and export demand remains slow. China has filed a WTO challenge to the most recent set of U.S. tariffs. The USDA reports 69% of U.S. soybeans are in good to excellent condition, down 2% on the week, with 65% of the crop blooming and 26% at the pod setting stage, both faster than average. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The National Oilseed Processors Association says member firms crushed 159.228 million bushels of soybeans during June, up 15% on the year, with bean oil stocks rising 4%. Safras e Mercado expects Brazil’s farmers to increase soybean acreage by 2.3%.

Corn was modestly higher on short covering and technical buying. Corn also had a bounce off the recent lows, while watching weather and trade issues, including a lack of public progress in NAFTA renegotiations. Feed and fuel demand should remain solid, but it looks like there’s another large U.S. crop looming. Export sales have slowed in the last few weeks and export inspections continue to lag. As of Sunday, 63% of U.S. corn is silking, compared to 37% on average, with 72% rated good to excellent, 3% below the previous week. The USDA’s next set of supply, demand, and production numbers is out in August. Ethanol futures were steady to firm.

The wheat complex was lower on profit taking and technical selling. The complex is monitoring the back half of this year’s U.S. winter wheat harvest and spring wheat development. For spring wheat, 80% of the crop is rated good to excellent, unchanged from a week ago, with 93% of the crop headed, compared to 85% on average. For winter wheat, 74% is harvested, compared to the five-year average of 71%. The trade’s also keeping an eye on global crop conditions. The USDA did lower the world new crop production estimate and there’s a chance that number could decline further, but for now, the overall fundamental outlook remains bearish.

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