Market News

Soybeans, corn down watching late development weather

Soybeans were modestly lower on fund and technical selling. Crop development remains faster than average, weather looks non-threatening, and a slight week to week decline in the U.S. condition rating is typical for this time of year. Unknown destinations bought 250,000 tons of new crop U.S. bean meal; the new marketing year for soybean products starts October 1st. Despite that sale, bean meal futures were lower on the adjustment of product spreads, which supported bean oil. A poll of analysts by a wire service projects record soybean acreage for Brazil in 2018/19. Brazil’s Customs Agency reports 4.9 million tons of soybeans were exported as of August 17th, well ahead of the August 2018 pace, potentially hitting a monthly record of 8 million tons, despite the premium to Brazil’s beans to U.S. supplies. China has been the big buyer, as expected, and while demand usually switches to the U.S. in late summer or early fall, the tariff tensions between the U.S. and China might complicate business. Chinese officials are scheduled to be in Washington D.C. this week for low level trade talks.

Corn was modestly lower on fund and technical selling. Corn is also watching late development conditions and expecting an early start to harvest in some areas with a major crop tour ongoing this week. New USDA supply, demand, and production estimates are out September 12th. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Brazil’s Customs Agency says an increased pace of soybean shipments has come at the expense of corn. AgriCensus reports a late harvest, trucking disputes, and the relatively low price of corn are also contributing to the slower than average sales. CONAB, via wire reports, expects Brazil’s corn for ethanol use to rise, alleviating some of the supply crunch. Bilateral NAFTA talks with Mexico are ongoing.

The wheat complex was lower on fund and technical selling, with Chicago and Kansas City leading the way down. The spring wheat harvest made solid progress over the past week and the winter wheat harvest is nearly over. The trade is also watching global crop development and harvest conditions, including concerns in parts of the European Union, Black Sea region, and Australia that could lead to increased export demand for U.S. wheat. Parts of Argentina and Brazil are also seeing early season stress on wheat. According to wire reports, Russia’s Ag Ministry says it is not considering a wheat export duty and raised its domestic grain production estimate to 100 million to 105 million tons. Japan is tendering for 167,787 tons of food wheat from the U.S., Australia, and/or Canada.