Market News

Down day for corn, soybeans, wheat

Soybeans were modestly lower on fund and technical selling. Beans continued to follow the lead of meal, while watching U.S. harvest activity and South American planting weather. Soybean meal peeled back from multi-month highs on profit taking and the adjustment of product spreads, while bean oil was up on that spread trade and a higher move in crude oil during the session. China bought 126,000 tons of 2023/24 U.S. beans Wednesday morning. Export demand for soybeans continues to run ahead of last marketing year’s pace but hasn’t met some expectations as China continues to also buy soybeans from Brazil. It remains to be seen when the corn, sorghum, and soybean sales covered by a recent import agreement between the U.S. and China will start to be reported. The demand outlook for soybean products continues to be comparatively good following the big drop in production last year for Argentina, the world’s largest exporter of bean meal and oil.

Corn was modestly lower on fund and technical selling. Some near-term U.S. harvest delays are probable, while planting conditions in Argentina and Brazil are mixed. Parts of Argentina and northern and central Brazil remain dry, while portions of southern Brazil are excessively wet. The U.S. is facing interior movement problems from extremely low levels on the lower Mississippi River, while shipments of Brazil’s second crop could see the largest impact from low levels on the Amazon River. Ethanol production was up, hitting a nine-week high. The U.S. Energy Information Administration says production last week averaged 1.04 million barrels a day, up 5,000 on the week and 7,000 on the year, while stocks totaled 21.398 million barrels, an increase of 286,000 from the previous weeks near two-year low, but a decrease of 893,000 from a year ago. The European Union’s crop agency MARS lowered its outlook for the bloc’s corn yield 5%, now below the five-year average, due to drought in some growing areas. The USDA’s attaché in Ukraine estimates 2023/24 production at 30.677 million tons, compared to the 2023/24 total of 26.187 million, with exports this marketing year at 24.7 million tons, compared to 36.9 million last marketing year.

The wheat complex was lower on fund and technical selling. Forecasts have additional rain in U.S. winter wheat growing areas ahead of the crop going into dormancy. There’s more talk, but no confirmation of China buying U.S. wheat. There have been no reported purchases of U.S. wheat by China in a couple of weeks, with the USDA’s weekly sales numbers out Thursday morning. Russia continues to control a big chunk of the global market and Ukraine is still shipping out grain despite the ongoing war with Russia, including attacks on export infrastructure by Moscow. The USDA’s attaché in Kyiv pegs wheat production at 22.892 million tons, compared to 21.929 million a year ago, with 2023/24 exports at 10.5 million tons, compared to 17.122 million in 2022/23. There’s the chance of improved demand for U.S. wheat, but that’s hampered a little by recent rain in Argentina and parts of Australia potentially stabilizing yield and the continued inaction on import duties by India despite high domestic prices and talk of imports.