Market News

Profit taking pushes corn, soybeans, wheat lower

Soybeans were lower on profit taking and technical selling. The trade is waiting to see what’s next with China, with their soybean demand impacted by African Swine Fever. Beijing has recently confirmed a slowdown in bean purchases coinciding with significant drops in swine herd size. There are more than 200 million bushels of previously purchased U.S. beans yet to be shipped to the world’s biggest buyer of the oilseed. U.S. and Chinese tariffs remain in place and no timeline for negotiations has been released publicly. Weekly export inspections were up on the week and the year but remain well behind the 2017/18 pace. As of Sunday, 95% of U.S. soybeans are blooming, compared to the five-year average of 99%, and 22% are blooming, compared to 49% on average, with 54% of the crop in good to excellent shape, up 1% on the week. Soybean meal was lower and bean oil was mostly weak, following beans.

Corn was lower on profit taking and technical selling. Corn continues to watch the weather, with hot, dry weather in some key growing areas and forecasts for more later this week. The USDA reports 17% of corn is silking, compared to the usual pace of 42%, and 58% of the crop is in good to excellent condition, 1% more than a week ago. Parts of Illinois, Iowa, Missouri, and Nebraska have been mostly experiencing a hotter, drier weather pattern, while parts of the northern Midwest have had heavy rainfall and southern and southeastern Corn Belt are seeing an impact from Tropical Storm Barry. Results of the USDA acreage resurvey and prevent plant totals are out August 12^th. Weekly export inspections were bearish, with less than two months remaining in the 2018/19 marketing year. Ethanol futures were lower. U.S. ethanol, sorghum, and DDGS are all possible Chinese purchase targets. The trade is also waiting for advancement of the USMCA.

The wheat complex was lower on profit taking and technical selling. The winter wheat harvest is moving quickly with strong yields canceling out protein and disease concerns and the spring crop is in better than a year ago shape. For winter wheat, 57% of the crop is harvested, compared to 71% on average. For spring wheat, 78% of the crop has headed, compared to 87% normally this time of year, and 76% of the crop is called good to excellent, down 2% from last week. The trade is also watching weather issues in some export competitors, including Australia, Canada, Europe, Russia, and Ukraine. The USDA did lower some production outlooks last week and more losses are probable unless weather improves, but the world crop will still likely be larger than a year ago. It’s early and the recent rally has priced U.S. wheat above what most importers want to pay, but U.S. sales and inspections are ahead of last marketing year’s pace. DTN says Jordan has two open milling wheat tenders.