Market News

Corn down, expecting better harvest weather

Soybeans were modestly lower on fund and technical selling. Beans are waiting for confirmation of rumored purchases by China, with new U.S. tariffs still scheduled to go into effect in December, unless a deal is reached in the next round of face to face talks in November. The trade is also watching planting weather in South America, with most projections still calling for large crops in Argentina and Brazil, even with recent dry conditions. Most forecasts do have rain headed for parts of Brazil. Stateside, development and harvest remain slow, while the USDA’s national crop condition rating improved slightly on the week but remains below a year ago. Soybean meal was lower and bean oil was firm on the adjustment of product spreads.

Corn was modestly lower on fund and technical selling. Corn development and harvest are also behind average, but forecasts for most areas look dry and cool, which will at least help harvest activity, even if it won’t do much for development. The trade is waiting to see how much of the crop was lost or damaged by last weekend’s weather. Mexico bought 228,600 tons of U.S. corn, with 137,160 tons for 2019/20 and 91,440 for 2020/21. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday. The industry has expressed disappointment in the EPA’s proposed biofuels rule. Corn is also watching planting and pre-planting conditions in Argentina and Brazil, both of which have become bigger export competitors. Ukraine has also become a major competitor for the global corn market share. The USDA’s attaché in Ukraine has 2018/19 exports at 28 million tons, with most of the sales headed to the European Union and China. 2019/20 production is seen at 33.32 million tons with exports of 25.4 million tons.

The wheat complex was modestly higher on short covering and technical buying. Nationally, winter wheat planting and emergence are close to average, while some of the spring wheat crop in the U.S. and Canada just might not get harvested following the recent winter-like storm. The USDA projects a record global supply at the end of the 2019/20 marketing year, with the next set of projections out November 8^th. DTN says Egypt is tendering for 60,000 tons of soft wheat. The USDA’s weekly export sales report is out Friday, pushed back by Monday’s holiday. 2019/20 U.S. wheat exports remain ahead of the 2018/19 pace, but sales and shipments have tailed off as the global harvest advances. Even if more crop loss is probable in Argentina, Australia, and Canada, that is expected to largely be made up by bigger crops in the European Union, Russia, and Ukraine. The USDA’s attaché for Ukraine has 2019/20 production at 29.068 million tons, a little bit less than the official USDA guess, but above the 2018/19 total of 25.056 million. Exports this marketing year are expected to be 18.5 million tons, compared to 16.5 million a year ago.