Market News

Grains, oilseeds up, watching weather

Soybeans were modestly higher on short covering and technical buying, ending an up and down day in the black. China bought 256,000 tons of new crop U.S. beans with the possibility more announcements this week. Last week, China picked up 204,000 tons last Friday after announcing the suspension of tariff increases on some U.S. ag goods. U.S. soybeans remain at a discount to Brazilian prices. Trade talks are expected to resume in October at a still unspecified date. Beans are also watching late U.S. crop development weather. The USDA reports 95% of U.S. soybeans are at the pod-setting stage, compared to 100% for the five-year average, 15% of the crop is dropping leaves, compared to 38% on average, and 54% of U.S. beans are rated good to excellent, down 1% on the week. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Bean oil picked up additional support from the sharply higher move in crude oil. Weekly export inspections were bearish. The trade is also watching planting conditions in Argentina and Brazil. The National Oilseed Processors Association says member firms crushed 168.085 million bushels of beans in August, larger than expected, a new record for the month, and the seventh largest of any month on record.

Corn was modestly higher on short covering and technical buying. Most forecasts have another mixed week of weather for key U.S. growing areas. Parts of the Corn Belt are expected to see more late summer heat, helping to speed up development, but possibly causing stress. An early freeze doesn’t appear to be in the cards, but even an on-time freeze could cause damage because of the slow development. The USDA’s national condition rating was expected to be steady to lower in the weekly update. According to the USDA, 93% of corn is at the dough-making stage, compared to 98% on average and 68% has dented, compared to the usual pace of 87%, while 18% of the crop is mature, compared to 39% normally in mid-September, and 4% is harvested, compared to 7% on average. 55% of the crop is in good to excellent shape, unchanged from a week ago, but with 1% moving from good to excellent. Ethanol futures were sharply higher, following crude oil, responding to the weekend strike on a major Saudi Arabian oil facility. The industry is also waiting to see what the White House’s biofuels package looks like. Weekly export inspections for corn were bearish, but sorghum has started the 2019/20 marketing year on a strong note.

The wheat complex was modestly higher on short covering and technical buying. The trade is expecting better spring wheat harvest progress, but there are concerns about quality after the recent rainfall in the northern Plains, which caused those delays earlier in the month. Canada has also seen widespread spring wheat harvest delays. The USDA says 76% of the crop is harvested, compared to 93% on average. Wheat is also monitoring conditions ahead of widespread winter wheat planting in the southern Plains, with 8% of the crop planted, compared to 12% typically this time of year. Dry weather continues to be an issue in Argentina and Australia. Weekly export inspections were solid, but the pace has slowed down, with the USDA projecting a record global supply during the 2019/20 marketing year. The department’s small grains summary and quarterly grain stocks numbers are out at the end of September, while new supply, demand, and production numbers are due October 10^th. DTN reports Algeria is tendering for 50,000 tons of milling wheat and Syria is in the market for 100,000 tons of durum.