Market News

Oversold bounce props up grains, oilseeds

Soybeans were higher on short covering and technical buying, buying back some of the recent losses. The USDA’s national condition rating was unchanged, holding at the lowest level in years, and development remains slower than normal. Near-term crop weather looks generally non-threatening. There was talk during the session of China buying U.S. ag goods, but nothing was confirmed. Trade talks are scheduled to resume in October at an unspecified date. Mexico did buy 138,000 tons of 2019/20 U.S. beans, along with 195,750 tons of U.S. bean meal, with 155,000 tons for 2019/20 and 40,750 tons for 2020/21. Soybean meal and oil were higher, following the lead of beans. According to Russia’s Ag Ministry, 20.9% of the soybean crop is harvested, with the running total at 1.3 million tons and a better than a year ago average yield. Russia has recently begun exporting soybeans to China. Soybean planting in Brazil is underway, but slow in some areas because of dry conditions.

Corn was higher on short covering and technical buying, also seeing an oversold bounce. The USDA’s national good to excellent rating was down 3% on the week and development is behind average. Even if near-term crop weather is non-threatening, an on-time frost would cause at least some damage in some areas because of that slow pace of development. New USDA supply, demand, and production numbers are out Thursday. Ahead of the report, analysts generally expected lower production and yield estimates from the USDA. Mexico picked up 278,200 tons of 2019/20 U.S. corn. The USDA’s weekly export numbers are also out Thursday. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was modestly higher on short covering and technical buying, following through on Monday. The U.S. spring wheat harvest is behind schedule because of rain in the northern Plains, while Australia is facing a third consecutive year of drought and parts of Argentina are dry. Australia’s version of the USDA lowered its 2019/20 wheat production forecast to 19.2 million tons, compared to the prior guess of 21.9 million. Those factors are partially canceled out by big crops in Russia and the European Union, both of which will likely lead to more export competition, especially with the recent slide in price for both origins. Russia’s Ag Ministry says 75.6% of the wheat harvest is complete, with the running total ahead of 2018, but with a slightly lower average yield. France’s Ag Ministry raised its soft wheat production guess to 39.45 million tons, compared to the previous projection of 38.2 million. The USDA’s small grains production summary and quarterly grain stocks figures are out at the end of the month. DTN says South Korea bought 76,000 tons of U.S. wheat.