Market News

Europe concerns support wheat complex

Soybeans were modestly lower on profit taking and technical selling, with the most active months posting more than $.30 week to week gains. Contracts gave back part of Thursday’s gains, which were inspired by expectations for trade talks with China. The meetings scheduled for the coming week are expected to be relatively low level and no agenda has been officially discussed, but multilateral talks could occur in November. The trade is also watching development conditions across the region and forecasts for generally beneficial weather. The USDA expects a record crop this year. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Beans are also keeping an eye on pre-planting conditions in Argentina and Brazil.

Corn was modestly lower on profit taking and technical selling, still managing a firm week to week finish. Corn was keeping an eye on the weather, with some near-term forecasts looking generally less threatening. Much of the Cornbelt is expected to receive at least some rain in the next week and September could be considerably milder than August in many areas. A major U.S. crop tour will start next week and with the crop development so much faster than normal, harvest activity could get underway in some areas around Labor Day. The USDA projects record production and a milder pattern would help the crop reach its full potential. NAFTA renegotiations with Mexico are reportedly advancing but talks with Canada haven’t had much public progress. Ethanol futures were weak on profit taking.

The wheat complex was higher on commercial and technical buying, along with the weak U.S. Dollar index. European wheat futures were higher on forecasts for hot, dry weather during key development phases, sparking the U.S. gains. Also, there’s been more chatter, but nothing firm, about Russia slowing down or even stopping wheat exports after sales hit a certain level. In any event, the gains Thursday and Friday helped the complex turn in a week to week gain. The U.S. spring harvest is ongoing, with weekly crop numbers out Monday afternoon and new supply, demand, and production estimates due September 12th. Many forecasts have at least some rain in the southern U.S. Plains ahead of winter wheat planting, while the northwestern U.S. Plains and western portions of the Canadian Prairies are expected to remain dry. The trade’s also monitoring weather in the Black Sea region and Australia. Jordan has an open tender for 120,000 tons of optional origin milling wheat.