Market News

Wheat leads on new export demand

Soybeans were higher on commercial and technical buying. Weekly export sales were larger than expected, with Argentina the big buyer. Those beans will likely be processed and resold, at least partially to China, following an agreement between Buenos Aires and Beijing. The trade continues to wait for signs of new outright demand for U.S. soybeans from China. There were late week rumors around the Pacific Northwest, but nothing firm. U.S. beans, without the tariff, would be competitively priced with Brazilian beans. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Soybean product exports were good. Stateside, beans are also watching the very tail end of the 2018 U.S. harvest, with some concerns about quality.

Corn was modestly higher on commercial and technical buying. The corn export pace continues to be bullish but could face increased competition in the coming weeks and months, especially from Argentina and Ukraine. Algeria this week bought 40,000 tons of Argentine corn. A recent non-USDA estimate for Ukraine puts their 2018 corn crop at 31.77 million tons, up 6% from 2017. The trade is also monitoring the very tail end of this year’s U.S. corn harvest. New supply and demand estimates are out Tuesday the 11th at Noon Eastern/11 AM Central. Ethanol futures were higher, supported by recent export demand, but staying wary of margins and waiting for the list of what products China will be ending tariffs on, potentially including ethanol, DDGS, and sorghum.

The wheat complex was sharply higher on commercial and technical buying, along with the mostly weak U.S. Dollar index. Weekly export sales were larger than expected with Egypt and Mexico out front, potentially a sign of more demand to come. Friday morning, unknown destinations bought 224,000 tons of 2018/19 U.S. hard red winter wheat. For now, there’s still plenty of competition, leaving the fundamental outlook bearish. Thailand is tendering for 68,100 tons of feed wheat and several other nations also have open wheat tenders. Wheat continues to watch the very tail end of U.S. winter wheat planting and emergence, waiting for the crop to fully enter dormancy.