Market News

Commercial demand, meal strength support soybeans, corn

Soybeans were higher on commercial and technical buying, along with spillover from soybean meal. The USDA’s national good to excellent rating was down 1% on the week, with faster than average development. The trade’s watching weather, with a chance for rain in some dry areas during key development phases. Soybean meal was sharply higher on commercial demand, if global crop weather issues persist, it’d likely lead to increased demand for feed stocks, while bean oil was weak on the adjustment of product spreads. Shipping out of Argentina’s Gran Rosario port are also supportive for meal. The soy complex will continue to monitor conditions in South America ahead of widespread planting, along with signs China might need to buy U.S. beans in the next few months, despite tariffs and ongoing trade tensions. The monthly National Oilseed Processors Association’s monthly member crush numbers are out Wednesday, with analysts expecting a crush of 161.45 million bushels, which would be considerably above a year ago. Effective with Tuesday’s close, margin maintenance levels are $2,350 per contract for September beans and $2,240 for November.

Corn was higher on commercial and technical buying, in addition to the strength in meal, albeit in light trade volume. The USDA’s national good to excellent rating for corn was also down 1% and development is ahead of normal, with the potential for early harvest in parts of the Cornbelt. Timely rain fall will be needed in some areas to help the crop reach full, expected record, potential. Dry parts of the European Union are also a continued concern. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Last week’s average was the second highest on record and corn for ethanol use remains on pace to meet or exceed USDA expectations for the 2017/18 marketing year, which ends August 31st.

The wheat complex was higher on commercial and technical buying. Chicago and Kansas City led the way, with this year’s U.S. winter harvest nearly over, with Minneapolis following late after spending much of the session mixed to weak. The USDA’s national spring wheat rating was up 1% with that harvest 35% complete. The USDA’s next set of supply, demand, and production numbers is out in September, including international crop numbers. The trade will continue to monitor weather impact in Canada, the European Union, Black Sea region, and Australia. Australia’s Bureau of Meteorology says an El Nino system “remains possible”, around a 50% chance, in the coming months. DTN reports Egypt is tendering for an unspecified amount of milling wheat. Russia is the biggest supplier of wheat to Egypt, but according to AgriCensus and Russia’s Ag Ministry, sales have slowed down because of concerns over crop quality following weather issues.