Market News

Down day for grains and oilseeds

Soybeans were lower on fund and technical selling. There was no resolution in this round of trade talks with China, but China’s media says another round is scheduled for September and the White House says Beijing has confirmed it will buy more U.S. ag goods. Stateside, the U.S. crop condition rating is near multi-year lows, but there’s still time for some of the crop to recover if weather holds. Unknown destinations bought 104,500 tons of U.S. beans, with 500 tons for 2018/19 and 104,000 tons for 2019/20. The current marketing year runs through the end of August. Soybean meal and oil were lower, following beans. The National Oilseed Processors Association’s monthly member crush numbers are out Thursday. According to reports, Chinese officials will visit Argentina in August to inspect soybean crush plants. Argentina is the leading export of soybean meal and China is the biggest buyer. African Swine Fever has curtailed Chinese demand somewhat.

Corn was lower on fund and technical selling. Weather isn’t great for crop development, but conditions are generally not seen as threatening or damaging into the early part of August. Parts of the region could use some rain, but temperatures are mostly expected to be moderate, maybe on the cool side in northern areas of the Corn Belt. An early frost would be an issue. New USDA supply, demand, and production numbers are out August 12^th, including the acreage resurvey results and prevent plant totals. Ethanol futures were sharply lower. The U.S. Energy Information Administration says last week’s ethanol production averaged 1.031 million barrels a day, down 8,000 on the week for the lowest average since April, while stocks were a record high 24.689 million barrels, up 779,000 from the previous week. DTN says South Korea bought 65,000 tons of optional origin corn, probably from either Argentina or Brazil. Ukraine has also become a bigger player in the corn export market.

The wheat complex was lower on fund and technical selling. Weather looks generally good for the winter wheat harvest and spring wheat development. Conditions have harmed wheat in parts of Europe and the Black Sea region, but it should still be a big global crop with an ample carryover. Strategie Grains currently has France at 39.98 million tons, up from both their last guess and 2018, and pegs Germany at 22 million tons, less than the previous projection for this year, but above a year ago. The next official global USDA projection is out August 12^th. DTN says Algeria bought 570,000 tons of milling wheat and Jordan purchased 25,000 tons of wheat, both from an unknown origin, while the Philippines picked up 165,000 tons of feed wheat. Also, Bangladesh bought 100,000 tons of wheat from Russia. U.S. wheat remains at a competitive disadvantage to many other exports and while 2019/20 sales are ahead of 2018/19, that was a low bar and it is very early in the current marketing year. Also, the dollar index has rallied recently, making U.S. goods more expensive on the export market. The Federal Reserve Wednesday did lower the overnight interest rate by 25 basis points, but Chairman Powell signaled further reductions are unlikely this year. The USDA’s weekly export numbers are out Thursday morning.