Market News

Corn, wheat higher ahead of supply and demand numbers

Soybeans were steady to modestly higher. Traders are watching development weather, which looks non-threatening for most of the region. There are some areas of concern and a long way to go, but on the balance, conditions are above year ago levels and the trade’s expecting a sizable crop, for now. CONAB left its estimate for Brazil’s soybean crop unchanged from June at 147.337 million tons, down 4.7% from 2023 and still well below the USDA. The USDA will update their guess Friday in the monthly supply and demand report. Domestically, the trade is expecting modest changes to 2024 U.S. production, old crop stocks, and new crop stocks. Old crop soybean export sales were down on the week at 7.6 million bushels, primarily to the Netherlands and Mexico, but with a cancelation by unknown destinations, while new crop sales were 7 million bushels, led by Mexico and unknown destinations. China’s first big new crop purchase will show up in next week’s report. Soybean meal was mixed on bull spreading, supported nearby contracts and pressuring deferred months, while soybean oil was up on commercial support.

Corn was modestly higher on short covering and technical buying. Development weather mostly looks favorable, but there is a chance of heat stress in some areas during parts of next week. While portions of the region will see scattered showers during that stretch, any prolonged stress could influence pollination. CONAB raised its guess for Brazil’s second crop, up 2.1% from last month at 90.007 million tons thanks to yield results from the ongoing harvest, but production is expected to be down 12.1% on the year. Total corn production in Brazil is pegged at 115.859 million tons, which would be 12.2% below 2023, including a first crop of 23.443 million tons, 14.4% less than last year, and a projected third crop of 2.409 million tons, potentially 11.8% above a year ago. Old crop U.S. export sales were up on the week, but below average, at 21.2 million bushels, with Colombia and Japan topping the list, partially offsetting a cancelation by unknown destinations, with new crop sales of 4.6 million bushels, mostly to Mexico, also with a cancelation by unknown. In Friday’s supply and demand update, the USDA is expected to increase its corn production guess from June due to the changes in acreage, while also increasing old and new crop U.S. ending stocks projections.

The wheat complex was higher on short covering and technical buying, along with the lower trade in the dollar during the session. Wheat was oversold and due for a bounce, but export demand remains sluggish, with Russia holding most of the market share due to a price advantage. U.S. sales last week were below the previous week at 8.8 million bushels, mainly to Thailand and Japan. It’s still early in the 2024/25 marketing year, but the pace is ahead of 2023/24. The trade’s watching weather issues in Europe, the Black Sea region, both Russia and Ukraine, and Argentina. CONAB estimates new crop wheat production in Brazil at 8.956 million tons, 1.2% less than last month due to weather issues in some areas, but potentially 10.6% larger than 2023’s total. Stateside, there are near-term harvest delays in parts of the Plains and Midwest, while scattered showers are possible in spring wheat growing areas of the northern U.S. Plains and Canada. Ahead of Friday’s supply and demand report, analysts see a larger U.S. production guess and bigger old and new crop ending stocks, along with modestly higher world ending stocks.