Market News

Lower yield, ending stocks guesses support corn

Soybeans were higher on fund and technical buying. The USDA’s production guess was up on the month due to higher acreage numbers, which canceled out a cut in yield. Still, there are some expectations that yield could decline further once harvest gets underway. New crop ending stocks were larger, with the higher production estimate canceling out a higher crush figure. Globally, the USDA did not make a lot of adjustments this month, aside from raising exports by Argentina slightly. The USDA says China bought 244,000 tons of new crop U.S. soybeans ahead of the open, bringing the two-day announced sales total to 380,000 tons. The USDA’s weekly export sales numbers are out Thursday. China reportedly sold 89% of the 516,000 tons of soybeans on offer at this week’s auction as Beijing continues to clear out room for new crop U.S. beans. Soybean meal and oil futures followed beans higher.

Corn was sharply higher on fund and technical buying. The USDA raised 2026 production on adjusted acreage but trimmed yield along with new crop ending stocks. The USDA raised export expectations for both old and new crop corn, contributing to that cut in stocks. Globally, the USDA’s adjustments were largely confined to the U.S. and Black Sea nations, but while the crop estimate for Brazil was up, exports were down. The U.S. Energy Information Administration says ethanol production averaged 1.117 million barrels per day, up 10,000 on the week and 24,000 on the year, with stocks of 24.798 million barrels, an increase of 274,000 from the previous week and 2.149 million from a year ago, while exports averaged 109,000 barrels per day, a decline of 91,000 from the week before and 14,000 from last year. The trade is also watching second crop harvest in Brazil, with CONAB’s update set for Thursday, August 13^th.

The wheat complex was sharply higher on fund and technical buying. The USDA trimmed U.S. winter and spring wheat production expectations even further, reflecting the general expectations for this to be the smallest domestic crop in decades. U.S. ending stocks and world production were lower than last month, with the USDA cutting exports for Russia and Ukraine. Those were relatively minor cuts though and those estimates will likely fall further as war rages on. The trade’s also watching wheat in Argentina, Australia, Canada, and Europe. The USDA did lower its guess for the European Union’s wheat crop due to weather. The next round of supply and demand estimates is out September 11^th.