Market News

Minneapolis wheat up, watching harvest in Canada

Soybeans were higher on speculative and technical buying. Beans expect harvest delays in some areas over the next week, but activity is ahead of average and record production is probable. The fundamental outlook remains bearish, as evidenced by the price spread. According to wire reports, FC Stone raised its 2018 outlook to 4.796 billion bushels with an average yield of 54.0 bushels per acre. The trade tensions with China are ongoing and there are plenty of beans available. China will eventually buy U.S. soybeans, but not directly from the U.S. until tariff issues are resolved. Soybean meal and oil were higher, following beans. According to Brazil’s trade ministry, via Allendale, September soybean exports were 4.61 million tons, down sharply on the month, but up slightly on the year, while meal exports were 1.29 million, a little bit less than August, and bean oil sales were 84,599 tons, a steep month to month drop. Soybean planting in Brazil is faster than average and expectations are for another record crop. Argentina’s acreage is a question mark following Buenos Aires’ adjustments to its export tax.

Corn was modestly higher on short covering and technical buying. Corn is also watching U.S. harvest activity, which is ahead of normal, but could slow down in some areas because of rain. The crop remains in very good condition for this time of year and it looks like the U.S. is on track for another large crop. The latest estimate from FC Stone, via wire reports, is for a crop of 14.940 billion bushels with an average yield of 182.7 bushels per acre. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Friday. Corn is also watching South American planting and development conditions. Brazil’s trade ministry says corn exports for September were 3,423,786 tons. The new USMCA is expected to be positive for corn demand. The USDA’s attaché in China estimates 2018/19 corn production at 221 million tons, compared to the USDA’s current official guess of 225 million, with the foreign outpost expecting weather and pest impact on yields.

The wheat complex was higher on commercial and technical buying. Minneapolis led the way on concerns about harvest delays and crop quality in Canada, with additional support from changes to grading regulations in the new USMCA, which could help U.S. exports. Chicago and Kansas City are watching winter wheat planting activity, expecting delays in parts of the Plains, but that would also be beneficial ahead of the crop moving into dormancy. The trade is also watching planting and development conditions in South America, the European Union, the Black Sea region, and Australia. Another round of rumors about Russia restricting exports circulated during the session, but for now, those remain just rumors. DTN says the United Nations bought 50,000 tons of milling wheat for Yemen, adding Tunisia has issued two new tenders: one for 75,000 tons of unspecified quality wheat and one for 50,000 tons of durum. According to AgriCensus, Iran is expected to buy 10 million tons of wheat from domestic sources this year.