Market News

Soybeans, corn up, watching harvest activity

Soybeans were modestly higher on short covering and technical buying, but ending the day closer to the session’s lows than the highs. The trade expected good harvest progress in the weekly update, but with activity remaining slower than usual after the recent delays. Some production potential has probably been lost, but it’ll be a while until the results are known. According to the USDA, 53% of U.S. soybeans are harvested, compared to the five-year average of 69%, with collection behind average in 13 of the top 18 production states. 66% of the national crop is in good to excellent condition, unchanged on the week and up 5% on the year. The trade is also watching planting in South America. Brazil’s Presidential election is Sunday, the 28th, potentially impacting policy. Soybean meal was mixed, adjusting spreads, and bean oil was firm, following beans. Weekly export inspections remain slow. Trade tensions with China are ongoing ahead of a potential meeting at the G20 in Argentina late next month. The USDA corrected last week’s announcement cancellation of 180,000 tons of 2018/19 U.S. soybeans from China to unknown destinations. Given China’s need for soybeans, that probably would have ended up headed that way anyway, either directly, like the recent small shipment of U.S. beans, through a third party, or as soybean products.

Corn was modestly higher on short covering and technical buying, closing just below the day’s highs. This year’s U.S. corn harvest was expected to be very close to average, with generally good conditions in the forecast most of this week. As of Sunday, the USDA reports 49% of corn is harvested, compared to 47% on average, with half of the top production states steady to slower than normal. 68% of the crop is rated good to excellent, steady with a week ago and up 2% from a year ago. Over the past week, 1% did move from excellent to good. New USDA supply, demand, and production numbers are out November 8th. The USDA could lower the yield outlook for the second month in a row after the recent crop weather issues with the final 2018 totals out in January. Weekly export inspections were bullish. Ethanol futures were higher. The trade’s waiting for advancement of year-round E15 use, along with the proposed USMCA, or “new NAFTA”. Last week’s USDA Cattle on Feed report looks neutral for corn demand. Placements into feedlots were lower than expected, but there’s a record amount of cattle on feed.

The wheat complex was modestly lower on fund and technical selling, along with the firm U.S. Dollar index. Winter wheat planting was expected to be just behind the normal pace, nationally. The USDA says 72% of the winter wheat crop is planted, compared to the usual pace of 77%, and 53% has emerged, compared to 55% on average. The trade is also watching global crop development conditions and while the potential exists for crop loss and increased export demand for U.S. wheat, for now, the fundamentals remain bearish. Minneapolis continues to have a better outlook when compared to Chicago and Kansas City, because of protein content. Syria bought 200,000 tons of milling wheat from Russia. Jordan is tendering for 120,000 tons of wheat and Algeria is in the market for 50,000 tons, both milling quality. The USDA’s attaché in Australia projects 2018/19 wheat production at 18 million tons because of hot, dry weather in eastern Australia, which would be exacerbated by a potential El Nino pattern.