Market News

Soybeans, corn down on demand questions, weather

Soybeans were lower on fund and technical selling. The trade is waiting to see what’s next in talks with China, while watching the weather. As of Sunday, 90% of U.S. beans are blooming, compared to the five-year average of 96%, and 68% of the crop is at the pod setting stage, compared to 85% on average, with 53% of the crop in good to excellent shape, down 1% on the week. Negotiations with China reportedly continue ahead of the next round of face to face talks. Beijing has stated it will avoid buying U.S. beans in the fourth quarter, relying on either state reserves or South America, with DTN reporting China purchased 1.5 million to 2 million tons of beans from Brazil over the past two weeks. That’s despite U.S. beans being the cheapest on offer. A private crop tour last week projected a lower average yield, with another major tour starting this week. Export inspections were up on the week and year, but this marketing year continues to trail last marketing year, which runs through the end of August. Soybean meal and oil were lower, following beans.

Corn was modestly lower on fund and technical selling. Corn is also watching the weather, with most forecasts generally calling for dry near-term conditions. Parts of the region did get some rain this weekend, but not enough to make up the soil moisture deficiency. There is also the chance for an early frost and a regular frost has damage potential because of the historically slow start to planting. The USDA says 95% of corn is silking, compared to the usual pace of 99%, while 55% is at the dough-making stage, compared to 76% on average, and 15% has dented, half of normal for mid-August. 56% of U.S. corn is called good to excellent, a week to week dip of 1%. Export sales and inspections are slow and domestic demand is being lessened by ethanol margins and feed wheat. Export demand has also been harmed by increased competition from Argentina, Brazil, and Ukraine. Ethanol futures were lower.

The wheat complex was modestly lower on fund and technical selling. Wheat export sales and inspections have been a bright spot but are expected to tail off as the world harvest advances. Increasing domestic feed wheat demand is also a positive for the complex, but those demand factors weren’t enough to stave off a lower move on Monday. While the spring wheat harvest is slower than average, yields have generally been strong and quality is reported as mostly good. New USDA supply, demand, and production numbers are out September 12^th. For winter wheat, 93% of this year’s harvest is complete, compared to 98% typically this time of year. For spring wheat, 16% of the crop is harvested, compared to 49% on average, and 70% of the crop is in good to excellent shape, up 1% from a week ago. Globally, parts of Australia, Canada, the European Union, and the Black sea region remain dry. DTN says Japan has an open feed wheat tender.