Market News

Corn, wheat gain ground, watching weather

Soybeans were modestly higher on short covering and technical buying. There’s at least some degree of renewed optimism about China, even as Beijing says U.S. tariffs need to be removed before fully committing to a deal. The next round of high-level face-to-face negotiations will be in November. “Phase One” of the pact has yet to be signed, but it reportedly being worked on. The trade is expecting the USDA to lower its 2019 U.S. crop production estimate next month. In South America, some rain is headed for portions of Brazil and Argentina will also need timely rainfall. DTN says that when quoted in their domestic currency, Brazil’s soybean prices are at their highest level in a few years, which could help U.S. sales. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying. The USDA says it will collect new harvested area information in Minnesota and North Dakota ahead of the November crop report and if there are changes, it’ll be in that set of numbers. Some yield potential has been lost – the question is how much. Near-term, harvest conditions look good for many areas, but longer-term outlooks are trending cooler and wetter for parts of the Corn Belt. Corn is also watching planting conditions in South America. Argentina and Brazil, along with Ukraine, have become big export competitors recently, which has been reflected in the weekly U.S. numbers for the past few months. The USDA’s weekly export sales report is out Friday morning. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 971,000 barrels per day, up 8,000 on the week, with stocks at 22.061 million barrels, an increase of 837,000.

The wheat complex was higher on short covering and technical buying, buying back some of the recent losses. Winter wheat planting could see near-term delays in parts of the Plains later this week. Some of the spring wheat crop in the northern U.S. Plains and Canada likely just won’t be harvested after the recent snow. More than a quarter into the 2019/20 U.S. marketing year, sales have been sold, but are showing signs of tailing off due to increased competition. Strategie Grains raised its soft wheat export projection for the European Union to 27.3 million tons. DTN says Egypt bought 405,000 tons of wheat from France, Russia, and Ukraine, while Saudi Arabia is tendering for 595,000 tons of wheat. Ethiopia, Jordan, Syria, Tunisia, and Turkey also have open wheat tenders. Some private analysts are lowering their projections for Argentina’s crop because of dry weather.