Market News

Soybeans, corn buy back some losses

Soybeans were higher on short covering and technical buying, recovering part of Tuesday’s losses. The USDA is projecting lower crush and export demand this marketing year due to competition from South America but is also expecting tight new crop supplies. The USDA’s yield estimate could see further reductions once harvest starts, which would pull supplies down even further unless there’s more aggressive demand rationing. The USDA’s weekly export sales report is out Thursday morning. The trade will be watching demand from China closely. The trade is also monitoring planting conditions just ahead of widespread activity in Argentina and Brazil. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was higher on short covering and technical buying. Early corn harvest activity is underway, with a dry finish to the growing season in much of the Midwest. The USDA’s next yield projection is out October 12^th. Solid corn for ethanol demand is canceling out some of the influence from slow exports. The U.S. Energy Information Administration says ethanol production last week averaged 1.039 million barrels a day, up 27,000 on the week and 76,000 on the year, while stocks dropped to the lowest levels since late December 2021 at 21.171 million barrels. That’s a drop of 450,000 from the previous week and 1.572 million from a year ago. Corn is keeping an eye on the very tail end of Brazil’s second crop harvest and conditions ahead of widespread planting in South America.

The wheat complex was higher on short covering and technical buying. Russia has attacked one of Ukraine’s main ports, potentially disrupting trade out of the Black Sea region. Still, if there was going to be an impact, it’ll be on Ukraine, with their exports for the first half of this month sharply below a year ago. Russia has proved nearly immune because of its price advantage, even having attacked several of Ukraine’s key trade points while maintaining its hold on the export market. Hungary, a Russian ally, says it agrees with a handful of other Eastern European nations about a ban on Ukrainian grain exports into those nations if the European Union doesn’t extend its temporary ban. The E.U. agreement does allow Ukraine’s grains to moved through but not sold in several Eastern European states. Weather issues are a concern in parts of Argentina and Australia. France’s AgriMer lowered its projection for 2023/24 non-E.U. soft wheat exports to 9.5 million tons, also reducing its outlook for sales within the bloc.