Market News
Corn posts more losses
Soybeans were higher on short covering and technical buying. Contracts were oversold, with most of Monday’s losses because of that decline for corn futures. Monday’s USDA numbers bullish on beans, but not enough to break the hold of corn. Reports have the U.S. and China resuming negotiations in two weeks and the U.S. will delay tariffs on some Chinese products. The selected new tariffs, originally scheduled to go into effect September 1st, will be delayed until December 15th and mostly impact consumer goods and electronics. Soybeans continue to watch weather conditions, with slower than average crop development and a crop in below than average shape. Soybean meal was higher on at least some optimism connected to China and the adjustment of product spreads, which pressured soybean oil. The trade is waiting for widespread planting in South America, along with potential policy changes following a worse than expected performance in the Argentina’s presidential primary for Macri. The USDA is projecting big 2019/20 crops for Argentina and Brazil.
Corn was lower on commercial and technical selling, with December hitting a multi-month low. Corn continued to react to the surprisingly bearish USDA numbers, following through on Monday’s mostly limit down move. Development remains slow and the crop is in below average condition, but some dry areas have received rain this week, which could help improve ratings. In any event, there’s still a way to go until this crop is made, much less harvested. Like the July report, this round of reports probably created more questions than it answered. The next set of supply, demand, and production numbers is out September 12th. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Globally, the trade has an eye on crop weather in the European Union, Mexico, and Ukraine, along with South America ahead of planting.
The wheat complex was mostly lower, with Chicago mostly weak and Kansas City and Minneapolis down. The USDA’s new supply, demand, and production numbers were neutral, with minimal changes for most projections, leaving the overall outlook bearish. The September Kansas City contract was pulled to a new contract low and the lowest price for a September KC contract in several months. The winter wheat harvest should wrap up soon, while the spring wheat harvest is slower than normal. Export demand has been a bright spot but is expected to tail off as the world harvest continues. DTN says Taiwan has an open tender for 94,950 tons of U.S. milling wheat, expected to be shipped from the U.S. Pacific Northwest. U.S. wheat is competitively priced, but shipping costs have limited demand to some extent. Some forecasts have more dry weather in Australia, Canada, and the former Soviet Union, along with parts of the U.S. spring wheat region. Ukraine’s Ag Ministry says 98% of their spring wheat crop is harvested, with a running total of 27.9 million tons.
It is time to investigate the USDA. FAKE numbers.