Market News

Soybeans, corn hit by broader market, harvest

Soybeans were lower on fund and technical selling. Commodities in general had spillover from the broader market, which dropped on concerns about a potential debt default by a major Chinese property developer, and beans also saw pressure from global vegetable oils. Additionally, the losses in beans and bean oil sent soybean meal lower. Aside from some scattered rain, harvest conditions are good in most areas. The USDA says 6% of U.S. soybeans are harvested, matching the five-year average, with 48% of the crop dropping leaves, compared to 48% on average, and 58% rated good to excellent, up 1% on the week. IHS Markit projects U.S. production at 4.381 billion bushels with an average yield of 50.6 bushels per acre. The firm expects a fractional decrease in planted area in 2022. Export inspections were up on the week, down on the year, with Mexico and Japan topping the list of recipients. China’s General Administration of Customs says that nation imported 9.04 million tons of soybeans from Brazil during August, a jump of 10.9% from August 2020. China’s imports from the U.S. were 17,575 tons, a drop of 89.4% from last year. Early planting activity is underway in Brazil.

Corn was lower on fund and technical selling, in addition to spillover from the outside markets. Corn is watching harvest activity, yield results, and disease reports, needing a trend-line yield or better to meet demand and further limit price inflation for end users. As of Sunday, 10% of corn is harvested, compared to 9% on average, with 93% of the crop dented, compared to 89% normally in mid-to-late September, and 57% mature, compared to 47% on average. 59% of corn is called good to excellent, 1% higher. IHS Markit estimates this year’s U.S. crop at 15.046 billion bushels with an average yield of 176.3 bushels per acre and is anticipating a slight increase in planted area next year. Shipping issues out of the Gulf following damage caused by Hurricane Ida are a continued negative. Export inspections were above a week ago, but below a year ago, Mexico and China claimed the top two slots. It’s early, but the 2021/22 pace is well behind 2020/21. Ethanol futures were unchanged. Corn is also watching planting conditions in Argentina and Brazil. AgRural says 22% of Brazil’s new first crop is planted.

The wheat complex was lower on fund and technical selling. Broader market pressure also hit wheat, especially a higher move in the dollar. That makes U.S. goods more expensive on the export market, limiting demand. Export inspections were slightly more than what’s needed to meet USDA projections, with Mexico and the Philippines leading the way. For winter wheat, 21% of the crop is planted, compared to the usual rate of 18%, and 3% has emerged, compared to the five-year average of 2%. Globally, Paris milling wheat was lower ahead of the U.S. session, while Russia’s prices gained for the 10^th week in a row, and Ukraine’s wheat harvest is reportedly complete, with their ag ministry pegging production at 33 million tons. The trade is also monitoring development conditions in Argentina and Australia. IHS Markit sees a more than 3% rise in U.S. planted area for all types of wheat from 2021 to 2022.