Market News

Soybeans, wheat manage modest gains

Soybeans were modestly higher on short covering and technical buying. China says it wants additional talks before signing phase one of the trade pact, no tariffs were removed during this last round of negotiations, and new U.S. tariffs could go into effect in December 15^th. More Chinese purchases of U.S. ag goods have been rumored, but nothing has been confirmed, with some USDA agencies closed Monday for Columbus Day. China’s General Administration of Customs says soybean imports during September were 8.2 million tons, compared to 9.48 million in August and 8.01 million in September 2018. The trade is also watching crop weather in the U.S. and South America. According to reports, 9.5% of Brazil’s 2019/20 soybean crop is planted, compared to the five-year average of just over 12%. Stateside, crop damage is probable after the weekend cold snap and snow in parts of the U.S. Soybean meal and oil were up modestly, following beans. The National Oilseed Producers Association’s September member crush numbers are out Tuesday.

Corn was steady to modestly lower on spread trade and profit taking. The trade is assessing probable crop damage and more harvest delays after the weekend storm in the upper Midwest and Plains. Conditions this week generally look better for late development and harvest, except in the most heavily affected areas, which could continue to see ramifications from the storm for weeks, if not months. Frost reportedly even reached parts of the Texas Panhandle. Ethanol futures were mostly weak. U.S. ethanol and corn are reportedly potential purchase targets by China. Russian consulting firm IKAR projects that nation’s corn crop at 14.1 million tons. Corn is also watching conditions in Argentina and Brazil, with about 60% of Argentina’s corn growing areas at risk for damage from dry weather, but with a chance of rain. The Buenos Aires Grain Exchange says corn planting is 24% complete. Argentina and Brazil, along with Ukraine, have become big players in the global corn trade at the expense of U.S. market share.

The wheat complex was modestly higher on short covering and technical buying. That weather also further delayed the spring wheat harvest in the northern U.S. Plains and Canada and winter wheat planting in some areas. The USDA’s export inspections and crop progress numbers are delayed until Tuesday as some federal offices were closed for Columbus Day. U.S. wheat is also being talked about as a potential purchase target by Beijing. China did recently buy 130,000 tons of 2019/20 U.S. white wheat. China’s Ministry of Agriculture and Rural Affairs wants wheat producers to expand planting by 2%. Beijing says it will maintain the state supported wheat quota at current levels in 2020, capping the covered volume at 37 million tons. Ag consulting group IKAR pegs Russia’s wheat crop at 75.6 million tons, but there is talk the crop could exceed 78 million tons. The trade is also watching weather in Australia and Argentina.