Market News

More new lows in corn

Soybeans were higher on short covering and technical buying. Development remains slow with the crop in poorer than a year ago condition and Mexico bought 451,766 tons of 2019/20 U.S. beans. The new marketing year for beans got underway September 1^st. It was an up and down day with the continued questions about China putting some early pressure on beans before shifting to the background. The USDA’s next set of supply, demand, and production numbers is out September 12^th. That’ll include new South American production numbers ahead of widespread planting. AgRural is projecting a 1.1% increase in planted area for Brazil, below the five-year average for expansion. Argentina is expected to plant more beans at the expense of corn. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly lower on fund and technical selling. Corn made another round of new lows, even with the slow development and relatively poor shape of the crop. Near-term, most forecasts don’t look too threatening, but because of this year’s issues, even an on-time frost could cause some damage. Ag Resource and Allendale this week have put out production and yield estimates below the USDA’s August projections. The fundamental outlook continues to be the big bearish factor, with a large U.S. supply, some loss of feed demand due to more wheat feeding, and an increase in export competition. Ethanol futures were mostly lower. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday, delayed by Labor Day. The Renewable Fuels Association says U.S. ethanol exports during July were 120.1 million tons, down 6% on the month. Canada was the top destination for the third month in a row, while shipments to Brazil dropped 44%.

The wheat complex was higher on short covering and technical buying. The spring wheat harvest remains slower than average and the USDA’s condition rating was down slightly on the week. The trade is also watching conditions ahead of widespread winter wheat planting in the southern Plains. Export demand has been good for U.S. wheat this marketing year but is expected to slow down as the global harvest advances. Globally, there are weather concerns, including a third year in a row with drought in Australia, but the USDA projects a record large global supply and a few competing exporters will be harvesting record or near record crops. Exporters in the Black Sea region are expected to see most of the benefit from the continued Australian weather issues. DTN says Turkey bought 250,000 tons of optional origin wheat, while Japan is tendering for 137,570 tons of food wheat from the U.S., Australia, and/or Canada. The USDA’s weekly export sales report is out Friday morning.