Market News

Soybeans, corn start August mostly modestly higher

Soybeans were steady to mostly modestly higher. Forecasts for this week have generally mild temperatures, but parts of the region remain dry, potentially stressing the crop. The USDA says 73% of U.S. soybeans are in good to excellent condition, up 1% on the week, with 85% of the crop blooming, compared to the five-year average of 82%, and 59% setting pods, compared to 54% on average. Unknown destinations bought 260,000 tons of U.S. soybeans, with 8,000 tons for 2019/20 and 252,000 tons for 2020/21. U.S. prices remain at a discount to Brazil. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Oil had additional support from strong global vegetable oil demand, with palm oil higher heading into Monday’s session on strong July exports from Malaysia. According to the USDA, the soybean crush for June was 177 million bushels, slightly lower than expected, compared to 180 million in May and 158 million for June 2019. With just about a month left in the 2019/20 marketing year, weekly export inspections continue to trail the 2018/19 pace, but China was the biggest destination last week.

Corn was mostly modestly higher. Corn was also watching the weather and that potential crop stress in parts of the Midwest and Plains. As of Sunday, 72% of U.S. corn is rated good to excellent, unchanged, and 92% of the crop is silking, compared to 87% usually in early August, with 39% at the dough making stage, compared to 33% on average. The USDA’s next production estimate is out on the 12^th, along with the updated supply and demand projections. Ethanol futures were steady to weak. The USDA says corn for ethanol use during June 2020 was 378.9 million bushels, up 26% from May, but down 17% from June 2019, with the year to year decrease tied to margin concerns and uncertainties about demand because of COVID-19. DDGS production of 1,664,454 tons was up 35% on the month, but down 15% on the year. Weekly export inspections were down on the week, but up on the year, with the overall pace behind last marketing year.

The wheat complex was lower on commercial and technical selling. Some private firms have raised production outlooks for Russia, while dry areas of Australia have recently received rain. Both of those countries are export competitors. APK-Inform did lower the outlook for Ukraine’s milling wheat crop to 40% of total production. The trade is also monitoring wheat weather in Argentina, which trades mostly with other members of the Mercosur bloc, while Brazil could produce a record crop this year. The U.S. winter wheat harvest has wrapped up in some areas as the spring wheat harvest gets underway. For winter wheat, 85% of the crop is harvested, compared to 88% normally this time of year. For spring wheat, 73% of the crop is called good to excellent, 3% above a week ago, and 5% is harvested, compared to 10% on average. The USDA says the wheat grind for flour during the second quarter of 2020 was 218.994 million bushels, down 6% from the first quarter and 3% less than the second quarter of 2019. DTN says Tunisia bought 50,000 tons of soft milling wheat and 25,000 tons of durum. Weekly export inspections were more than what’s needed to meet USDA projections for the 2020/21 marketing year.