Market News

Grains, oilseeds up ahead of USDA numbers

Soybeans were higher on short covering and technical buying. The trade is watching U.S. weather and waiting to see what’s next with China. Negotiations have resumed, while African Swine Fever is having an impact on China’s soybean import demand. No timeline has been announced for high level face to face discussions and U.S. and Chinese tariffs remain in place. For now, the bulk of China’s soybeans are supplied by Argentina and Brazil. The USDA could make some acreage adjustments Thursday because of the slow corn and spring wheat planting paces, but widespread changes aren’t expected until August, about the time pollination starts, and there’s a long way to go until the crop is made. Soybean meal and oil were up, following beans.

Corn was higher on short covering and technical buying, bouncing back after early losses. Corn is also watching the weather, generally expecting conditions to help development. The USDA could make some yield and acreage changes Thursday, but big adjustments might wait until August, after the current resurvey wraps up. Thursday’s numbers are out at Noon Eastern/11 Central. The USDA could also adjust exports as sales continue to slow down with increased competition from South America and Ukraine. Cash basis levels remain strong in the east, while flooding in New Orleans is expected to disrupt shipping out of the Gulf. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production averaged 1.047 million barrels a day, down 34,000 on the week, while stocks were up 165,000 barrels at 23.099 million. That’s a multi-week low for production because of July 4^th and a multi-week high for stocks because of slower blending demand.

The wheat complex was higher on short covering and technical buying, also recovering from early modestly lower activity. Weather should help the winter wheat harvest pick up steam and be good for spring wheat development. It’s early, but exports are ahead of last marketing year’s pace. The USDA’s weekly numbers are out Thursday morning. DTN says Japan is tendering for 98,705 tons of food wheat from the U.S., Australia, and/or Canada, and Jordan is in the market for 25,000 tons of milling wheat. The USDA’s attaché for Australia projects 2019/20 wheat production at 21.5 million tons, up from 2018/19, but below average because of drought or near drought conditions in key growing areas. The drought impacted 2018/19 crop restricted supply, reduced exports, and led to the first bulk wheat imports in about a decade. The trade is also watching weather in Australia, Canada, Europe, and the Black Sea region.