Market News

Soybeans, corn, wheat higher ahead of Friday’s USDA numbers

Soybeans were higher on commercial and technical buying. Most analysts expect the USDA to lower its yield estimate Friday, in-line with some recent private projections. It is the critical pod-filling stage for most of this year’s crop and large swaths of prime U.S. production areas have been hit by hot, dry weather at times, cancelling out the average to nearly ideal conditions in other portions of the region. Exactly how many acres were planted this year is also an unknown, with the USDA publishing an updated look at that figure Friday. Soybean meal and oil were up on the fundamental implications of a smaller soybean crop. Bean meal had additional support from strong domestic cash demand and the sale of 103,400 tons of U.S. soybean meal to Mexico, while bean oil picked up additional interest from a higher move in crude oil. Old crop soybean export sales last week were a net reduction for the sixth out of the last seven weeks following cancellations by unknown destinations and China, with new crop at more than 475,000 tons, primarily to China and unknown destinations. CONAB has Brazil’s 2022 soybean crop at 124.048 million tons, unchanged from July and down 10.2% on the year.

Corn was higher on commercial and technical buying. Corn is expecting a lower yield estimate from the USDA Friday following hot, dry weather in some U.S. growing areas during key development phases. The question is just how much of a reduction does the USDA make this month, but it is likely that any major changes will wait until at least September, when the estimates will be based on actual field level data. Friday’s reports are out at Noon Eastern/11 Central. CONAB lowered their corn production estimate for Brazil slightly on a reduction for the second and third crops. First crop production is pegged at 24.979 million tons, up 0.7% on the month and 1% on the year, with the second crop at a record large 87.407 million tons, 1.2% less than July, but 43.9% more than 2021, and the third crop at 2.306 million tons, a decrease of 4.3% from a month ago, but an increase of 41.6% from a year ago. CONAB says about 80% of Brazil’s second crop has been harvested. Old crop U.S. corn exports were considerably larger than both the prior week and the four-week average, but still short of 200,000 tons, with Mexico and Japan topping the list. New crop sales were slightly lower than old crop, with Italy picking up more than half of the total. Strategie Grains sees the European Union corn crop at just over 55 million tons, a drop of 20% on the year due to hot, dry conditions in some key growing areas.

The wheat complex was higher on commercial and technical buying. Export demand for U.S. wheat remains slower than expected, but the dollar index has trended lower recently, which could help competitiveness. Last week’s U.S. wheat exports were up solidly from the prior week, but below the four-week average, mostly to Mexico and South Korea. Physical shipments last week were more than what’s needed to meet projections for the 2022/23 marketing year. Hot, dry weather is having an impact on spring wheat in parts of the northern Plains, with the USDA possibly lowering that average yield estimate as well Friday. Most of the major adjustments for wheat are expected to be on the global side of the ledger, including the production estimates for Argentina, the European Union, India, and Russia. Ukraine continues to be a big question mark. The first wheat shipments from Ukraine’s Black Sea ports under the agreement with Russia brokered by Turkey and the U.N. are expected to leave next week. Quality could be a concern.