Market News

China questions weigh on soybeans

Soybeans were modestly lower on fund and technical selling. It was an up and down day, largely because of uncertainties about China. The rumored purchases of U.S. ag goods by Beijing haven’t surfaced, at least not yet, and a couple hundred million bushels of U.S. beans previously purchased by China remain unshipped, with only about a month and a half left in the 2018/19 marketing year. Recent rhetoric from Washington D.C. and Beijing indicates a deal probably isn’t all that close and both side’s tariffs remain in place. Most forecasts have a hotter, drier pattern for soybean and grain growing areas of China. Stateside, near-term weather concerns are also present for soybeans ahead of the pollination phase. Soybean meal and oil were lower, following beans.

Corn was fractionally higher following a midday dip from the early session highs. Corn is watching the weather with a chance of heat stress this week in some key U.S. growing areas. After that, forecasts generally look less threatening for much of the crop, with cooler temperatures and improved chances of rain that have recently seen a net drying effect. The USDA’s acreage resurvey results and prevent plant totals are out in August. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol stocks last week were up 356,000 barrels to 23.365 million, the third week in a row with a gain even with more E15 access. Production averaged 1.066 million barrels a day, 19,000 higher. FC Stone estimates Brazil’s second corn crop at 71.7 million tons, up 1.5 million on the month, for total production of 99.7 million tons. Stone sees exports at 35 million tons. Brazil’s an increasing export competitor and supplies in Argentina and Ukraine are priced below U.S. corn.

The wheat complex was modestly lower on fund and technical selling. The winter wheat harvest is moving forward with good yields canceling out concerns about protein content and disease issues. Conditions in the northern Plains are expected to beneficial for spring wheat development. DTN says South Korea bought 20,000 tons of wheat from the U.S. and 10,000 tons from Canada, while Egypt reportedly purchased 60,000 tons of wheat from Russia. It’s early, but U.S. sales are ahead of the previous marketing year’s pace. The USDA’s weekly export numbers are out Thursday morning. Allendale says Russia’s grain union pegs total 2019 grain production at 128 million tons, wheat accounting for 78 million of that, adding an investment plan from Moscow could push domestic production over 150 million tons.