Market News

Continued tariff tensions send soybeans lower

Soybeans were modestly lower on commercial and technical selling in light trade volume. New tariffs from the U.S. and China are in effect, likely prolonging the trade tensions. Unknown destinations bought 162,000 tons of 2018/19 U.S. soybeans. That could eventually end up in China via a third party, but the European Union has stepped in recently to fill some of the trade void. Weekly export inspections were bearish. The USDA reports 71% of soybeans are at the leaf dropping stage, compared to the five-year average of 57%, and 14% of the crop is harvested, compared to 8% on average, with 68% of U.S. beans rated good to excellent, 1% higher than last week. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Beans are keeping an eye on the planting paces in Argentina and Brazil. In Brazil, AgRural, via AgriCensus, says planting in Parana is moving at a record clip and harvest could start in January, shortening the window of potential U.S. purchases by China.

Corn was modestly higher on commercial and technical buying, the fourth session in a row with a gain. Weekly export inspections were bullish and ahead of the weekly USDA numbers, the trade expected at least some reported slowdown in harvest activity in some areas last week with the potential for more this week. Some of those gains may be given back Tuesday. As of Sunday, 97% of corn is dented, 72% is mature, and 16% is harvested, compared to the respective averages of 93%, 53%, and 11%, with 69% of the crop called good to excellent, up 1% on the week. Quarterly grain stocks numbers are out Friday at Noon Eastern/11 AM Central. Last week’s Cattle on Feed report is viewed as nominally positive for corn demand. Demand for ethanol use has become at least somewhat of a question mark because of processing margins and a lack of certainty about policy from the White House. Ethanol futures were mostly firm. Corn is also monitoring the early South American planting pace, along with harvest delays in parts of Canada and NAFTA talks with Canada and Mexico ahead of the October 1st deadline.

The wheat complex was modestly higher on commercial and technical buying, also in low trading volume. Heavy snow hit parts of Canada over the weekend, stopping harvest and likely damaging some of what was still in the field. In the U.S., after heavy rainfall in some areas, but ahead of a drier pattern, for winter wheat, planting is 28% complete, compared to the usual pace of 26%. For U.S. spring wheat, harvest is at least officially wrapped up. Wheat is also watching winter wheat planting conditions in the European Union and Black Sea region, along with development weather in Australia. New USDA small grain production numbers are also out Friday at Noon Eastern/11 AM Central. The United Arab Emirates is tendering for 60,000 tons of milling wheat. The USDA’s Commodity Credit Corporation bought 10,000 tons of U.S. hard red winter for distribution in Ghana. Weekly export inspections were bearish.