Market News

Corn, soybeans bounce back, but wheat loses more ground

Soybeans were firm on short covering and technical buying, in light trade volume. Beans are in very good condition and the trade expects record production, but heavy rain could damage some of the crop and contracts were due for a bounce. Informa Economics latest estimate is 4.698 billion bushels with an average yield of 52.9 bushels per acre, above the USDA’s August projections. China’s tariff on U.S. beans continues to hang over the market, with no reported public progress ahead of more expected U.S. tariffs on Chinese goods. The final U.S. 2017/18 export sales totals are out Friday. ABIOVE increased its estimate for Brazil’s 2018 bean exports to a record 76.1 million tons, while slashing stocks to 1.465 million. Soybean meal was up sharply and bean oil was down modestly, adjusting product spreads. Oil had additional pressure from a drop in crude oil. The U.S. Census Bureau reports July 2018 biodiesel exports were 36,487 tons, a drop of 43% from July 2017. Statistics Canada says canola stocks at the end of July 2018 were 2.391 million tons, compared to 1.342 million on July 31st, 2017. The trade is also monitoring pre-planting conditions in South America.

Corn was modestly higher on short covering and technical buying. Corn was also due for a bounce, also watching the weather, with probable early harvest delays and flooding in the near-term forecast. Informa currently pegs corn at 14.621 billion bushels with an average yield of 178.8 bushels per acre, more than the USDA’s last guesses. New USDA supply, demand, and production numbers are out Wednesday, September 12th. Ethanol futures were steady to lower. The U.S. Energy Information Administration says ethanol production for the week ending August 31st was 1.087 million barrels, up 17,000 on the week, while stocks dropped 358,000 barrels to 22.703 million. It looks like corn for ethanol use easy exceeded the USDA’s projection for 2017/18. For ethanol exports, the Census Bureau says exports during July were 104.4 million gallons, down 12% on the year. Distillers grain sales were 1,107,891 tons, up 11% from July 2017.

The wheat complex was lower in a lightly traded session on fund and technical selling. The complex saw another round of pressure from Russia’s denial of export taxes or restrictions this marketing year. There is still a chance Moscow could change its mind as the spring wheat harvest and winter wheat planting advance, so denials could be taken with a grain of salt. In any event, some of the key production areas of Australia remain in a drought and Canadian wheat stocks were down on the year. According to Statistics Canada, all wheat stocks on July 31st, 2018 were 6.180 million tons, compared to 6.856 million the previous year. Excluding durum, supplies were 4.706 million tons, down from the 5.028 million a year ago. Kansas City led the way down on recent rainfall in hard red winter growing areas ahead of widespread winter wheat planting. The USDA’s weekly export sales report is out Friday at 8:30 Eastern/7:30 Central, delayed by Labor Day.

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