Market News

Soybeans, corn down, watching South America

Soybeans were lower on profit taking and technical selling, closing towards the middle of the day’s range. Business could be choppy with the U.S. and China scheduled to meet next week for Cabinet-level trade talks. Aside from protracted negotiations, concerns about African Swine Fever and China’s economy could also limit demand. The trade dispute is also having an impact on multinational trading firms, with Bunge lowering its annual profit outlook. China did show up in the week export inspections report. The trade is watching weather in South America, including uncertainties about forecasts for parts of Brazil. Portions of central Brazil did get rain over the weekend, but about 1/3 of the region is seeing increased heat stress. AgRural says just over 6% of Brazil’s crop is harvested, compared to the five-year average of just over 1%. Indonesia has reportedly agreed to buy soybeans from Nebraska. Soybean meal was lower and bean oil was firm on the adjustment of product spreads.

Corn was modestly lower on profit taking and technical selling. Corn is also watching weather in South America, with the planting of Brazil’s second corn crop just getting underway as their soybean harvest moves forward. Brazil’s second crop is the larger of the two and the source of most of their exports. Corn is waiting for advancement in trade talks with China and some movement on the USMCA. 2018/19 corn export inspections remain ahead of the 2017/18 pace, with Japan and Mexico the leading destinations last week. Ethanol futures were lower. The industry continues to monitor margins, while waiting for more signals on year-round E15 use and signs of new export demand. China is reportedly also interested in U.S. corn, DDGS, and sorghum. The European Union is importing corn at a record pace following drought, but a lot of the business is going to Ukraine, because of transportation costs.

The wheat complex was mixed, mostly modestly higher. More talk of new export demand supported Chicago and Kansas City, but confirmation is hard to get because of the government shutdown. No China in the export inspections this week, but Egypt was present. The trade is also watching Russia’s pace of sales and reported supply levels, along with Black Sea wheat prices. Russia’s Ag Ministry still indicates it won’t restrict wheat exports but is planning to regulate domestic prices. DTN says Syria bought 200,000 tons of milling wheat from Russia and the Philippines purchased 85,000 tons of feed wheat from the U.S. and Australia. Bangladesh is tendering for 50,000 tons of milling wheat. Minneapolis was down on profit taking.