Market News

Corn, soybeans down on weather outlook

Soybeans were lower on fund and technical selling. Development remains slow and the USDA’s national crop condition rating was down 1% on the week, but near-term weather looks non-threatening, which is expected to accelerate development, even if it doesn’t do much for the condition rating. China bought another 260,000 tons of 2019/20 U.S. soybeans, bringing the total since last Friday to 720,000 tons. The U.S. and China are expected to resume high level trade negotiations in October and while tariff increases have been delayed, nothing’s been repealed. The trade is also watching planting conditions in Argentina and Brazil. Soybean meal and oil followed beans lower. Oil had additional pressure from profit taking and the retreat in crude oil.

Corn was lower on fund and technical selling. Corn is also watching the late crop development pace, along with early harvest activity, both of which remain slower than normal. Still, near-term crop weather is expected to benefit both development and the harvest. Most forecasts show very little chance of an early frost, but even an on-time frost could create issues in some areas. There are reports that the U.S. and Japan are close to a trade deal, but nothing has been signed and might not be until the end of the month. Corn is also waiting for the enaction of the USMCA trade pact. China could also be an emerging export market for U.S. corn and ethanol because of tight domestic corn supplies and a lack of production capacity. China’s Ag Ministry says fall armyworm did not reach northeastern growing areas, China’s biggest corn production region. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The industry is waiting to see what the White House’s biofuels reform package looks like.

The wheat complex was lower on fund and technical selling. The spring wheat harvest and early winter wheat planting are both behind schedule, but weather also looks mostly beneficial for wheat as well. Export demand is showing signs of tailing off as the world harvest advances, with the USDA projecting a record large supply at the end of the current marketing year. Also, prices for competing nations have fallen as their crop sizes rise, putting U.S. prices at a disadvantage. The expected production shortfalls in Argentina and Australia are expected to be more than made up by larger crops in other export competitors. The USDA’s small grains summary and quarterly stocks report are out at the end of September, while new supply, demand, and production numbers are due October 10^th. DTN says Japan is tendering for 127,893 tons of food wheat from the U.S., Australia, and/or Canada and Jordan is in the market for 120,000 tons of milling wheat.