Market News

Harvest pressure sends soybeans, corn to new lows

Soybeans were modestly lower on fund and technical selling, with November notching a new contract low. The trade was expecting generally good early harvest progress in most areas for much of this week, with already very large on-hand supplies reported in western portions of the growing region. The USDA says 53% of U.S. soybeans are dropping leaves, compared to the five-year average of 36%, and 6% is harvested, compared to 3% on average. 67% of U.S. beans are in good to excellent shape, down 1% on the week. The stalemate with China over tariffs continues and inspections were bearish, but unknown destinations bought 241,000 tons of 2018/19 U.S. beans. According to several reports, the U.S. will place tariffs on another $200 billion on Chinese goods. China’s Ag Ministry says frost in Heilongjiang damaged around 4.5% of soybeans in the top production province, probably trimming about 275,000 tons off the expected total. Soybean meal and oil were down, following beans. The National Oilseed Processors Association says member firms crushed 158.885 million bushel of soybeans in August, an all-time monthly high, but less than what many were expecting and down from July. The trade is also watching conditions in South America ahead of widespread planting.

Corn was modestly lower on fund and technical selling, pulling December to a new contract low. Corn was also expecting generally good harvest progress ahead of a wetter, cooler pattern in some areas of the Midwest later this week. As of Sunday, 93% of U.S. corn has dented, compared to 86% typically this time of year, 54% has dented, compared to 36% on average, and 9% is harvested, compared to the usual pace of 6%. 68% of U.S. corn is rated good to excellent, unchanged with last week. Florence has delayed harvest activity in parts of the southeastern Cornbelt and likely cost some producers their entire crop. The USDA’s next set of supply, demand, and production estimates is out October 11th. Weekly export inspections were bullish, but it is very early in the 2018/19 marketing year. Ethanol futures were mixed, mostly weak. NAFTA renegotiations are ongoing.

The wheat complex was mixed, with Chicago and Kansas City modestly lower and Minneapolis mostly firm. Winter wheat planting progress was expected to be mostly good in the weekly USDA update, ahead of expected delays later this week. For winter wheat, 13% of the crop is planted, compared to the five-year average of 14%. For spring wheat, 97% of the crop is harvested, compared to 92% on average. The trade’s also watching weather in Europe, the Black Sea region, and Australia. Western Australia was hit by a frost over the weekend, probably limiting export potential and adding to the overall crop woes, with drought in eastern growing areas. Saudi Arabia bought 630,000 tons of wheat and Tunisia purchased 70,000 tons of durum, both optional origin. Morocco is tendering for 336,364 tons of durum. AgriCensus says Russia is asking Morocco to lower its wheat import tax to 30% by the end of 2018.