Market News

Cautious optimism supports soybeans

Soybeans were higher on commercial and technical buying. There’s renewed, albeit reserved, optimism about China, with high-level talks reportedly scheduled for October 10^th and 11^th. There have also been unconfirmed reports of new sales of U.S. soybeans to China, with U.S. beans at a discount to competing origins. All that said, nothing has been signed and most of the major tariffs remain in place. Large parts of Argentina and Brazil are dry during early planting and forecasted rain for Brazil might not meet initial expectations. Stateside, as of Sunday, 34% of U.S. soybeans are dropping leaves, compared to the five-year average of 59%, with 54% of the crop in good to excellent shape, steady with a week ago. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Soybean inspections were bullish, but 2019/20 trails 2018/19.

Corn was modestly higher on short covering and technical buying. Early harvest activity is expected to be delayed in some areas by a wetter weather pattern, but the early frost threat is limited heading into October. The USDA says 96% of corn is at the dough making stage, it’s usually over by now, and 79% has dented, % compared to 94% on average, while 29% of the crop is mature, compared to 57% normally in late September and 7% is harvested, only up 3% on the week and 4% behind average. Still, even an on-time frost in parts of the Corn Belt would cause at least some damage because of the lagging pace of development after the historically slow start to planting. Corn is waiting to see what happens with Japan and the USMCA. The USDA’s quarterly grain stocks numbers are out on the 30^th. Ethanol futures were higher. The industry continues to wait for details on the White House’s biofuels reform package.

The wheat complex was mixed, mostly lower. Minneapolis was up on forecasts for more spring wheat harvest delaying rain and concerns about crop quality. For spring wheat, 87% of the crop is harvested, compared to 97% normally this time of year. Heavy rainfall and cool temperatures have also affected Canada’s spring wheat crop condition and harvest pace. Chicago and Kansas City were down, watching the early stages of winter wheat planting. For winter wheat, 22% of the crop is planted, compared to 8% a week ago and the typical pace of 24%. The USDA’s small grains summary is out September 30^th. Weekly export inspections were down on the week, but up on the year and remain ahead of last marketing year’s pace. DTN says Egypt bought 180,000 tons of wheat from Russia and Bangladesh is tendering for 180,000 tons of milling wheat. The trade is also watching weather in Argentina and Australia.