Market News

Grains, oilseeds up Friday, but still down on week

Soybeans were higher on short covering and technical buying, with the most active months still losing at least $.10 on the week. The trade is waiting to see what’s next with China ahead of the negotiations later this month. Both the U.S. and Chinese tariffs remain in place and while the U.S. is planning to delay some new tariffs, there are concerns Beijing might still retaliate. China is already an investor in Brazil, but reportedly also intends to increase investment in Argentina. China’s National Grains and Oil Information Center indicated China might be able to rely on just state reserves and South America in the fourth quarter. Unknown destinations bought 296,500 tons of 2019/20 U.S. soybeans Friday morning. The new marketing year gets underway September 1^st. U.S. crop weather looks mostly non-threatening for the near-term with rain in parts of the Midwest, which could help the USDA’s national condition rating improve. That report is out Monday afternoon and the USDA’s next set of supply, demand, and production estimates is due September 12^th. Soybean meal and oil followed beans higher.

Corn was higher on short covering and technical buying, blunting what was still a big weekly drop following the USDA’s updated production outlook. Corn is also watching the weather and there are concerns about an early frost in some areas. That’s a concern because of the historically slow pace of planting this year for both corn and soybeans. A recent crop tour showed variable yields in beans and corn, with another major tour getting underway on the 19^th. Slow export demand limited gains. The currencies of Argentina and Brazil have both moved lower this week and Ukraine’s prices are also competitive, even after the decline in U.S. prices. DTN says South Korea bought 63,000 tons of optional origin corn, “likely” from South America. Ethanol futures were higher.

The wheat complex was modestly higher on short covering and technical buying, but Chicago, Kansas City, and Minneapolis all still lost ground for the week. Exports have been better than expected, but the U.S. didn’t get any of the most recent tender milling wheat tender from Egypt and demand is expected to tail off as the world harvest advances. Also, while U.S. prices are competitive, freight costs have limited demand to some extent. Out of the Egyptian purchase, 175,000 tons were from Russia and 120,000 tons were from Ukraine. Taiwan does have an open tender for a routine amount of U.S. wheat. The U.S. spring wheat harvest has been slowed down by rain, while the winter wheat harvest should be close to wrapping up nationally. The USDA’s attaché in Canada has 2019/20 wheat production at 32.65 million tons, compared to 31.769 million in 2018/19, with a slight decrease in planted area canceled out by a return to normal yields.