Market News

Corn finishes day in positive territory

Soybeans were modestly higher on short covering and technical buying. Near-term forecasts are mixed, better for some areas than others, and forecasts for September are also mixed. The trade is waiting to see what’s next with China. There hasn’t been a whole lot of news on U.S./Chinese trade this week, which might be a case of no news is good news. For now, China is expected to continue to rely on South American beans, with new crop planting just around the corner. Brazil is expected to see an increase in acreage, possibly contributing to massive wildfires in the Amazon. Weekly export inspections have picked up steam in recent weeks but remain behind last marketing year. Soybean meal and oil were up, following beans.

Corn was modestly higher on short covering and technical buying, recovering from early mixed activity. Mexico bought 328,000 tons of new crop U.S. corn Wednesday morning, but, overall, export demand is slow with the marketing year ending August 31st. U.S. corn has faced increased competition from Argentina, Brazil, and Ukraine. Domestic demand is also a concern, on both the feed and the fuel fronts. The trade is watching development conditions and this week’s major crop tour has generally shown lower than a year ago yields. New USDA supply, demand, and production numbers are out September 12th. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 1.023 million barrels a day, down 22,000, with supplies of 23.367 million barrels, 516,000 lower. Next week’s numbers will be the first week since the EPA granted 31 small refinery waivers to the consternation of the ethanol industry.

The wheat complex was mixed, with Chicago mostly weak on spread adjustments and Kansas City and Minneapolis modestly lower. Export demand has been solid through the first quarter of the 2019/20 marketing year but is expected to tail off and U.S. and world supplies are ample. Most forecasts have more near-term rain delays for the spring wheat harvest, along with probable delays for the tail end of the winter wheat harvest. Both spring and winter wheat yields have anecdotally been good. DTN says Japan and Morocco both have open export tenders involving U.S. wheat. The USDA’s weekly export numbers are out Thursday morning. Allendale says Ukraine’s grade trade union UZA projects 2019 wheat production at 27.72 million tons with export potential of 21 million, compared to 24.83 million tons and 15.53 million, respectively, a year ago.

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