Market News

Grains, oilseeds up after mostly wet weekend

Soybeans were higher on short covering and technical buying. The trade was expecting mixed planting progress to be reported by the USDA after another wet weekend in many key growing areas and more on the way during the early part of the week. The USDA says 85% of U.S. soybeans are planted, compared to the five-year average of 97%, with 71% of the crop emerged, compared to 97% on average. In the first rating of the year, 54% of U.S. beans are in good to excellent shape, compared to 73% a year ago. Friday’s USDA acreage report will include planted acreage and acreage still intending to be planted. Quarterly grain stocks numbers are also out Friday at Noon Eastern/11 AM Central. The U.S. and China are expected to talk tariffs later this week at the G20 summit. A resolution in this round of negotiations is unlikely, but progress would be appreciated. China was the top destination for U.S. beans last week and except for the tariff, Beijing would probably be buying more U.S. beans because of the discount to supplies in Argentina and Brazil. Soybean meal was up and bean oil was down on the adjustment of product spreads.

Corn was higher on short covering and technical buying. Corn was also expecting mixed planting progress, with a lot of uncertainties about actual acreage totals ahead of the Farm Service Agency’s prevent plant report in August. A USDA resurvey of producers is likely and the August 2019 crop report could bear some similarities to August 1993. As of Sunday, 96% of corn is planted, planting is usually wrapped up by now, and 89% has emerged, compared to the normal pace of 99%, with 56% of the crop rated good to excellent, down 3% on the week. Export demand is slow and the U.S. is priced about most competing origins, particularly corn from South America and Ukraine. Weekly export inspections were bearish, down on both the week and the year. Ethanol futures were mostly firm. The trade is keeping an eye on dry conditions in parts of China and is waiting for the U.S. and Canada to enact the USMCA. Mexico’s legislature passed the trade pact last week.

The wheat complex was higher on speculative and technical buying, with Chicago and Kansas City taking the lead for grains and oilseeds. Most forecasts for this week have better weather for winter harvest activity, but some damage has been done. Lower protein content is expected to lead to a big jump in feed wheat usage. For winter wheat, 15% is harvested, compared to 34% on average, and 94% has headed, compared to 99% typically this time of year, with 61% in good to excellent shape, 3% less than last week. For spring wheat, planting has officially wrapped up, with 7% of the crop headed, compared to the normal pace of 29%, and 75% of the crop called good to excellent, down 2%. It’s early, but 2019/20 U.S. wheat export inspections are ahead of the 2018/19 pace. France’s AgriMer says 80% of that nation’s soft wheat is in good to excellent shape, steady on the week, but milling wheat futures in Paris were sharply higher because of forecasts for hotter than normal temperatures during key development phases. The trade is also watching weather in Australia, Canada, Russia, and Ukraine. DTN says Taiwan bought 83,000 tons of U.S. milling wheat.