Market News

Corn up, soybeans mostly higher on late season weather concerns

Soybeans were mostly higher, adjusting spreads, while ending the week with losses. Beans were back to watching weather, expecting the hot, mostly dry near-term conditions to have an impact on yield. Markets are closed Monday for Labor Day, pushing back several reports, including the weekly export inspections and crop progress and condition numbers. Unknown destinations bought 198,000 tons of new crop U.S. soybeans. That was the fourth day in a row with an announced sale of U.S. soybeans for a total of 892,000 tons. The spike in demand can be tied to a combination of value buying by end users and those end users trying to make sure they got the needed supplies in hand ahead of the U.S. harvest and widespread planting in Argentina and Brazil. The USDA says 185 million bushels of U.S. beans were crushed in July, up 10 million on the month and 4 million on the year. Soybean meal was lower Friday and bean oil was higher on the adjustment of product spreads.

Corn was higher on fund and technical buying, but still down modestly on the week. Corn was looking at a hot, dry finish to the growing season with only scattered rain in the forecast in the coming week. It won’t have much of a yield impact but those conditions are expected to speed up maturity and lower test weights, at least to some degree. The USDA’s updated yield and acreage numbers are out on the 12^th. Export demand for U.S. corn remains slow, but demand for ethanol use is a continued bright spot. The USDA says 454.039 million bushels of corn were used for ethanol production in July 2023, up 3% from June and 2% from July 2022, while DDGS production of 1,784,282 tons was down less than 1% from the prior month and 8% on the year. 2022 corn for ethanol use was 5.208 billion bushels, 1% more than 2021, while DDGS production was 21,638,356 tons, down 2%. Corn is keeping an eye on the end of Brazil’s second crop harvest with CONAB’s updated outlook on Wednesday, the 6^th.

The wheat complex was lower on fund and technical selling, with the most active months seeing a significant weekly decline. Contracts are oversold but wheat remains in a downtrend due to slow export demand. Soft red winter is becoming more competitive but hasn’t seen an appreciable spike in demand with other origins also in a better position over the last few weeks. Early in the second quarter of the 2023/24 marketing year for wheat, sales and shipments are behind the 2022/23 pace and could be the slowest overall in decades. Spring wheat yields have been better than expected in parts of the northern U.S. Plains, which should offset some of the anticipated losses in the Canadian Prairies. Weather issues in Argentina and Australia and possible quality issues in the European Union were non-issues. The trade continues to watch Russia’s war on Ukraine closely.