Market News

Grains and oilseeds up on crop weather concerns

Soybeans were modestly higher on short covering and technical buying. Weekend precipitation was generally light to scattered in the driest parts of the Midwest, ahead of what could be a warmer, drier pattern. Large portions of this year’s crop are at or near the critical pod filling stage. The USDA reports 70% of this year’s U.S. soybean crop is rated good to excellent, unchanged on the week, but with 1% moving from excellent to good. 86% of beans are blooming, compared to the five-year average of 77%, and 60% are at the pod setting stage, compared to 41% on average. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Soybean export inspections are on pace to meet the USDA’s estimate for the 2017/18 marketing year, which runs through August. The trade continues to watch for any new developments in trade with China. There’s been some rumbling that China might be U.S. beans because of higher South American prices, but nothing firm. According to wire reports, higher transportation costs and an erratic currency probably won’t be enough to keep producers in Brazil from planting record area later this year.

Corn was modestly higher on commercial and technical buying, along with spillover from wheat. Corn was also assessing weekend rainfall, with much of the corn crop also in key stages of development. Part of the crop has advanced too much to make too much of a difference, but it would help in parts of the Cornbelt and a sustained lack of soil moisture would pose problems for 2019 planting. As of Sunday, 72% of U.S. corn is rated good to excellent, steady on the week, with 91% of the crop silking, compared to 82% on average, and 38% is at the dough making stage, compared to the usual pace of 20%. The USDA’s first field-survey based production estimate of the season is out Friday, August 10th at Noon Eastern/11 AM Central. Ethanol futures were higher. 2017/18 corn export inspections have picked up steam, but with only about a month left in the marketing year, might not hit the USDA’s projection. Global crop weather issues could lead to stronger 2018/19 export demand. No public progress was apparent in last week’s U.S./Mexico trade meeting.

The wheat complex was higher on commercial and technical buying. The complex expects more crop loss in Europe, with additional weather concerns in the Black Sea region and Australia. It’s too late for some of crops in north and central Europe, Russia, and Ukraine, but timely rainfall would be a benefit for Australia. The USDA’s next set of supply and demand estimates out next week is expected to show a lower global production estimate. Stateside, for spring wheat, 78% of the crop is in good to excellent shape, down 1% from last week, moving from good down to fair, and 4% of the crop is harvested, compared to 4% typically this time of year. Last week’s spring wheat crop tour did show a lower than expected average yield projection. For winter wheat, 85% of the crop is harvested, just behind the five-year average of 86%. Jordan is tendering for 120,000 tons of milling wheat and South Korea is in the market for 63,000 tons of feed wheat, both optional origin.