Market News

Soybeans surge on China hopes

Soybeans were sharply higher on commercial and technical buying. The trade is more optimistic about a deal with China following recent actions by both Beijing and Washington D.C. on tariffs. There was talk during the session China bought U.S. soybeans, but nothing will be confirmed until Friday at the earliest. The USDA’s production estimate was a little bit larger than expected, but still down on the month and the year. Globally, the USDA didn’t make a lot of changes to the balance sheet, leaving South American production and Chinese imports unchanged. China’s Ministry of Agriculture and Rural Affairs lowered its 2019/20 soybean import guess to 84 million tons, less than what the USDA currently expects. Weekly export numbers were bearish. Soybean meal and oil followed beans higher. Statistics Canada currently has 2019 Canadian canola production at 19.358 million tons, down 4.8% on the year, with soybeans at 6.485 million tons, a decline of 10.8%.

Corn was higher on short covering and technical buying, along with spillover from soybeans. The USDA’s corn crop guess was above what some analysts were expecting heading into the report, but lower than a month ago and a year ago. That number could fall further, depending on conditions during the remainder of the development period. Near-term, weather is expected to range from non-threatening to favorable, but even an on-time frost could damage the crop in some areas because of the slow pace of development. Mexico bought 113,036 tons of new crop U.S. corn but weekly numbers were bearish early in 2019/20 with continued competition from Argentina, Brazil, and Ukraine. China’s Ag Ministry lowered 2018/19 feed consumption expectations citing the spread of African swine fever. Ethanol futures were higher ahead of a possible announcement on the White House’s biofuel package Friday. Statistics Canada currently sees Canada’s 2019 corn crop at 14.11 million tons, up 1.6% from 2018.

The wheat complex was higher on short covering and technical buying, in addition to spillover from corn and soybeans. U.S. wheat ending stocks were unchanged on the month, with no adjustments to the balance sheet. The USDA lowered the world production guess but raised global ending stocks. Overall, the USDA’s numbers were neutral, so a lot of the support was tied to the higher moves in beans and corn. New small grains production and quarterly stocks numbers are out at the end of the month, while new supply, demand, and production numbers are due October 10^th. Weekly export sales remain ahead of last marketing year’s pace, but shipments are slowing down as the global harvest advances. SovEcon has Russia’s new wheat crop at 74.9 million tons, up 500,000 from the previous projection, with total grain production of 118.2 million tons. The latest guess from Statistics Canada for all types of wheat is 32.491 million tons, a year to year increase of 0.9%, with spring wheat at 25.752 million, 7.6% higher, durum at 4.998 million tons, 13% lower, and winter wheat at 1.741 million tons, a drop of 30.7%. DTN says Taiwan is tendering for 110,300 tons of wheat.