Market News

Soybeans recover some losses

Soybeans were higher on short covering and technical buying in low trade volume. Contracts bought back some the recent losses, but still lost ground on the week, while waiting for something new on China and watching the weather. Most forecasts have less threatening conditions heading into August during the key pollination phase. There’s been more talk of China buying U.S. soybeans, but nothing’s surfaced. China has slowed down purchases of beans because of the continued spread of African Swine Fever and there have been reports of lower protein content in Brazil’s crop. Trade negotiations haven’t made a lot of public progress recently and U.S. and Chinese tariffs remain in place. There’s no reported timetable for the resumption of face to face negotiations. More than 250 million bushels of U.S. soybeans previously purchased by China remain unshipped with about a month and a half remaining in 2018/19. Soybean meal and oil were higher, following beans.

Corn was higher on short covering and technical buying, while still ending the week sharply lower. Corn is also watching the weather and while some heat stress is probable through the weekend, conditions should improve for most of the Corn Belt in the coming week. The USDA’s acreage resurvey results are out August 12th, along with prevent plant numbers and new supply, demand, and production projections. Domestic demand is good, but exports continue to show the impact of increased competition from South America and Ukraine. Ethanol futures were higher. Allendale says last week’s purchase of U.S. sorghum by China was the largest since April. U.S. ethanol and DDGS are also possible purchase targets by Beijing, as is corn if Fall Armyworm makes a significant impact. The USDA’s attaché in South Africa says that nation could export 1 million tons of white corn in 2019/20, about the same as 2018/19, but will still likely have to import 500,000 tons of yellow corn in 2018/19 because of drought. 2018/19 production is estimated at 10.9 million tons, down 13% from 2017/18.

The wheat complex was higher on short covering and technical buying, but all three U.S. exchanges posted week to week losses. Winter wheat yields are good, but there are the continued concerns about protein content and disease issues. Spring wheat is in better than average shape for this time of year. The USDA’s weekly crop numbers are out Monday at 4 PM Eastern/3 Central. U.S. wheat is priced above most major competitors and while the USDA did lower its global production outlook in the most recent supply and demand report and there are continued weather concerns in parts of Canada and the Black Sea region, the 2019/20 world crop should still be record large. The Buenos Aires Grain Exchange says Argentina’s 2019/20 wheat crop is nearly planted, with a year ago year increase in planted area. DTN says Japan bought 51,821 tons of food wheat from Australia and Canada, while the USDA’s Commodity Credit Corporation purchased 29,200 tons of U.S. soft white winter for Yemen and 20,000 tons of U.S. hard red winter for Ethiopia. Jordan is tendering for 120,000 tons of milling wheat and Taiwan is in the market for 90,650 tons of U.S. wheat.

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