Market News

Grains, oilseeds mixed in quiet trade

Soybeans were mostly modestly higher on spread trade and short covering. Weekly export sales were above expectations, China was the big buyer, but the shipments were bearish. Deputy level trade talks with China have resumed and high-level talks are scheduled for October at a still as-of-yet unspecified date. For now, there’s no deal and tariffs remain in place. Soybeans are also monitoring late season development conditions in the U.S. and planting conditions in South America. Planting has begun in Brazil and is about to get fully underway in Argentina. Analysts generally expect another record crop for Brazil, but soybeans could lose some acres to corn in Argentina. Soybean meal was firm and bean oil was weak on the adjustment of product spreads. With less than a month left in the 2018/19 marketing year for soybean production, meal and oil sales trail 2017/18 slightly.

Corn was mostly modestly higher on spread trade and short covering. Weekly corn export sales were larger than expected, but while it is early in the marketing year, commitments are behind last marketing year. Corn continues to face competition from Argentina, Brazil, and Ukraine. Allendale says Brazil’s 2019/20 corn crop is estimated at 102.3 million tons, which would be up more than 2% from the 2018/19 record. Most forecasts have more rain in parts of the Corn Belt later this week, possibly heavy in some areas. Ethanol futures were lower, waiting for details of the President’s biofuels reform plan. The USDA’s attaché in Egypt estimated 2019/20 corn imports at 10 million tons, up 3% from 2018/19 because of increased feed demand.

The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis up. Wheat exports were within expectations, slowing down as the world harvest advances, with the USDA projecting a record global supply at the end of the 2019/20 marketing year. The U.S. spring wheat harvest is expected to see more near-term rain delays and probable crop quality concerns, supporting Minneapolis. The U.S. Wheat Associates announced a letter of intent from the Taiwan Flour Millers Association to buy 1.8 million tons of wheat between 2020 and 2021. DTN says Egypt is tender for an unspecified amount of wheat, while Ethiopia is looking for 400,000 tons of milling wheat, Jordan is in the market for 120,000 tons of milling wheat, and Tunisia is tendering for 42,000 tons of optional origin milling wheat. The USDA’s attaché for Egypt has domestic wheat production at 8.77 million tons, up 320,000 on the year with a higher harvested area total. Imports are expected to be unchanged at 12.5 million tons.