Market News

Soybeans buy back part of big drop

Soybeans were modestly higher on commercial and technical buying. Contracts saw an oversold bounce after the big drop on Friday, with some direction from soybean meal, while watching weather. Many forecasts for this week have at least some rainfall in some of the drier parts of the growing region, aiding late development. The USDA reports 96% of U.S. soybeans are blooming, compared to the five-year average of 92%, with 84% at the pod setting stage, compared to 72% on average, and 66% of the crop in good to excellent condition, down 1% from a week ago. Bean meal led the complex on commercial buying after Friday’s losses, while oil was up, following that lead. Mexico bought 142,500 tons of 2018/19 U.S. soybeans. Export uncertainties continue, mainly due to the trade tensions with China. Friday, Brazil’s President signed a new freight law bill, establishing minimum rates and likely increasing transportation costs, ahead of Supreme Court hearings at the end of August. Most farm and transportation groups in Brazil oppose the law, which slowed down export sales.

Corn was modestly lower on commercial and technical selling. Corn followed through on last Friday’s post-USDA report losses while also watching U.S. weather. The USDA is projecting record production, but timely rainfall will be needed in some areas to help the crop reach its full potential. As of Sunday, 73% of U.S. corn is at the dough making stage, compared to 56% on average, and 26% has dented, compared to the normal pace of 13%, with 70% of corn in good to excellent shape, 1% less than last week. If there’s a positive in the latest round of supply and demand projections, it’s the potential for higher export demand in 2018/19, which starts September 1st. Ethanol futures were mostly weak. Mexico bought 212,372 tons of U.S. corn, with 142,248 tons for 2018/19 delivery and the remaining 71,124 tons for 2019/20. NAFTA renegotiations between the U.S. and Mexico are ongoing. According to wire reports, higher corn production in southern Europe may help to offset losses in northern areas, but the European Union will likely have to import livestock feed.

The wheat complex was sharply lower on follow through commercial and technical selling. The trade was expecting a lot of spring wheat harvest progress after a generally dry weekend in the northern Plains and anticipating the winter wheat harvest either being wrapped up or very close to completion. Chicago and Kansas City also have an eye on expected rainfall ahead of winter wheat planting. For spring wheat, 35% of the crop is harvested, compared to 27% normally this time of year, and 75% is rated good to excellent, up 1% on the week. For winter wheat, 94% of the crop is harvested, compared to the five-year average of 96%. Also, European milling wheat futures were sharply lower heading into the main U.S. session. Iraq is tendering for 50,000 tons of wheat. The trade is continuing to watch weather issues in parts of the U.S., Canada, European Union, the Black Sea region, and Australia. The USDA could lower global production estimates and increase it’s U.S. export outlook in the next round of supply and demand projections in September.