Market News

Soybeans buy back part of recent losses

Soybeans were modestly higher on commercial and technical buying. Contracts were due for a bounce, but the U.S. harvest is ahead of average for now, the crop is in very good condition, and trade tensions with China are ongoing. The European Union has picked up some of China’s share of the export market and is now the biggest U.S. customer. The trade is also watching the planting pace in South America. Brazil is off to a record start, but could slow down if an expected warmer, drier pattern surfaces, and there are uncertainties about Argentina because of Buenos Aires’ recent export tax decision. According to wire reports, China’s buying more soybeans from Argentina, at least some of which were originally purchased from the U.S. before being rerouted. Soybean meal was higher on an oversold bounce, also pulling bean oil modestly higher.

Corn was modestly higher on commercial and technical buying. Nationally, the corn harvest is ahead of average and the crop is in very good shape for this time of year, even after widespread rainfall in many areas over the past week. Most of the Cornbelt is expected to see another round of rain this week. The trade is also monitoring South American planting and NAFTA renegotiations ahead of the October 1st deadline. Mexico bought 239,630 tons of 2018/19 U.S. corn. Ethanol futures higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Production has backed off recently because of industry concerns about margins and federal policy towards renewable fuels.

The wheat complex was lower on profit taking and technical selling. Winter wheat planting is just ahead of normal and the spring wheat harvest is officially wrapped up. More rainfall in the Plains this week would delay planting activity, at least to some extent. Updated USDA small grain production and quarterly stocks numbers are out Friday at Noon Eastern/11 AM Central. The trade is watching winter wheat planting and development conditions globally, with Australia’s Bureau of Meteorology holding a 50% chance of El Nino developing later this year, potentially limiting rainfall in that country during key development phases. According to wire reports, recent rainfall is helping winter crop prospects in Russia and Ukraine. DTN says Taiwan is tendering for 110,000 tons of U.S. milling wheat and Japan is in the market for 109,150 tons of food wheat from the U.S., Australia, and/or Canada, while Bangladesh is tendering for 50,000 tons of unspecified quality wheat and Bahrain is looking for 25,000 tons of milling wheat, both optional origin.