Market News

Wheat, corn give back some gains

Soybeans were fractionally higher on commercial and technical buying, with contracts closing towards the low end of the day’s range. The trade is getting ready for talks with China and while it’s early and talks are expected to be relatively low level, they’re at least encouraged by both sides agreeing to meet. Trade negotiators would reportedly like to have the dispute with China wrapped up by November, but Beijing could need to buy U.S. beans as early as October. Another $16 billion in U.S. tariffs on Chinese goods are scheduled to go into effect this week. Beans are also watching U.S. crop weather during key stages of development. The USDA reports 91% of U.S. soybeans are at the pod setting stage, compared to the five-year average of 83%, and 65% of the crop is rated good to excellent, down 1% on the week, but up 6% on the year. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The trade is keeping an eye on pre-planting conditions in South America.

Corn was modestly lower on profit taking and technical selling. Corn will be monitoring a major crop tour this week and while weekend rainfall probably didn’t meet Friday’s forecasts in some of the driest areas, much of the region could receive more precipitation during the first half of this week. Early harvest activity is reportedly underway in parts of the southeastern Cornbelt. As of Sunday, 85% of U.S. corn is at the dough making stage, compared to 72% on average, and 44% is dented, well ahead of the usual pace of 26%, with 68% of the crop in good to excellent condition, 2% lower than last week, but 6% higher than this time last year. New USDA supply, demand, and production numbers are out September 12th. The current marketing year for corn runs through the end of August. NAFTA renegotiations are ongoing, with more reported progress in talks with Mexico than with Canada. U.S. officials are also discussing trade this week with Japan and the European Union. According to Allendale and the Wall Street Journal, official guidelines for the U.S. government’s $12 billion “Trade Aid” package could be released this Thursday, with implementation after Labor Day. Ethanol futures were lower.

The wheat complex was sharply lower on profit taking and technical selling, in addition to lower European milling wheat futures. Parts of the southern U.S. Plains received rain over the weekend ahead of winter wheat planting. Wheat is also keeping an eye on the U.S. spring wheat harvest pace and global crop conditions, including parts of Europe, the Black Sea region, and Australia that could lead to an increase in export demand for U.S. wheat. Still, wheat export trade is typically driven more by price than quality and the U.S. Dollar Index has gained some ground in recent weeks. For spring wheat, 60% of the crop is harvested, compared to 44% typically this time of year, and 74% of the crop is in good to excellent shape, 1% less than a week ago, but 40% more than a year ago. For winter wheat, 97% of the crop is harvested, compared to 98% on average, with parts of the northwest U.S. Plains the furthest behind. Jordan has an open tender for 120,000 tons of milling wheat. Wheat is also monitoring NAFTA renegotiations.