Market News

USDA numbers pressure corn, soybeans, and wheat

Soybeans were lower on commercial and technical selling, with the most active contracts pulled to a weak week to week finish. Quarterly stocks were larger than expected with slow fourth quarter demand and an upward revision to 2017 production. Beans continue to monitor U.S. harvest activity and South American planting. According to wire reports, 4.6% of Brazil’s 2018/19 crop is planted, ahead of last year and the five-year average, with generally favorable conditions expected. There’s less certainty about Argentina, after Buenos Aires extended its export tariff on beans. The trade is also monitoring U.S. soybean purchases by Argentina and Brazil, some of which are expected to go to China as Beijing tries to avoid buying U.S. beans because of trade tensions. Soybean meal and oil were lower, following beans.

Corn was lower on commercial and technical selling, erasing the week’s modest gains. Quarterly corn stocks were lower than a year ago, but still topped all expectations on slow fourth quarter demand. That number is also effectively the ending stocks total for 2017/18, but further revisions are probable. Corn was also watching U.S. harvest activity, in addition to early planting activity in South America. According to wire reports, 33% of Brazil’s first corn crop is planted, compared to 26% on average. Brazil’s first corn crop is the smaller of the two. Stateside, the trade’s waiting for Monday’s weekly crop progress and condition numbers, with the probability of a slowdown in parts of the Midwest because of rain. Ethanol futures were lower.

The wheat complex was lower on commercial and technical selling, extending the week’s losses. Quarterly wheat stocks were larger than expected with slow first quarter demand. The 2018 U.S. crop was 8% above a year ago, led by a big jump in spring wheat, which canceled out a decline in winter wheat. That decline in winter wheat was at least partially due to drought in the Southern Plains. Recent rainfall in some areas has caused some delays in the planting of this year’s crop, but the precipitation is welcome. The USDA’s next set of supply, demand, and production numbers is out October 11th. Wheat’s also watching winter wheat planting in Europe, the Black Sea region, and Argentina, along with development conditions in Australia.