Market News

Soybeans mixed, corn down, watching harvest

Soybeans were mostly fractionally higher, adjusting old crop/new crop spreads. The trade continues to watch scattered harvest delays, but many areas are expected to make generally good progress for most of this week. After that, outlooks are a little less certain. It remains to be seen how much damage was caused to this year’s crop by recent weather in some key growing areas. The USDA’s final 2018 production totals are scheduled for January, but if recent years are any indication, the “final” total will be subject to further revisions. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The trade’s continuing to monitor planting in South America, including the record pace and expected record production in Brazil. A Presidential run-off in Brazil later this month could impact that nation’s trade and ag policies. Tariffs from China continue to limit export demand. President Trump and President Xi are expected to meet at the G20 summit in Argentina late next month, but no official discussions have been made public. That said – the premium of Brazilian soybeans to U.S. supplies, even with the tariffs, could drive some business stateside, either directly, through a third party, or as soybean products.

Corn was weak to fractionally lower on fund and technical selling. Corn is also watching harvest activity and waiting for full damage assessments from wet weather in parts of the Midwest and Plains. The USDA’s next set of supply, demand, and production numbers is out November 8th, with another reduction in yield a possibility. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.011 million barrels per day, down 29,000 on the week, while stocks totaled 24.130 million, up 109,000. Production was a six-month low, while stocks were the second highest on record. Feed demand is solid and the USDA’s Cattle on Feed report could imply more feed usage. Other sectors are a little less certain. There’s a lot up in the air still about national year-round E15 use and a vote in Congress on the USMCA, a potential positive for exports, isn’t expected until 2019. Other proposed trade deals would also require Congressional approval.

The wheat complex was lower on fund and technical selling, along with firm trade in the U.S. Dollar index. While near-term winter wheat planting delays continue in parts of the Plains and Midwest, the soil moisture is mostly welcome ahead of the crop heading into dormancy. There are several open wheat export tenders, some of which could go to the U.S., and crop concerns for export competitors, but for now, fundamental outlook remains bearish. Jordan bought 60,000 tons of optional origin wheat, South Korea picked up 60,000 tons of optional origin feed wheat, and the Philippines purchased 55,000 tons of feed wheat from Australia. Demand could increase after Russia’s sales slow seasonally. The USDA’s weekly export numbers are out Thursday at 8:30 Eastern/7:30 Central.