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Soybeans, corn down on yield estimates, crop ratings
Soybeans were sharply lower on speculative and technical selling, with November hitting another new low for the move. The trade continued to digest the USDA’s record yield and production estimates while watching weather. Conditions are mostly favorable with 68% of the crop called good to excellent. That’s not always a one-to-one indication of a big crop but combined with the current yield projection and the larger new crop ending stocks guess, the fundamentals look bearish. If there’s an upside to the drop in price, it’s an improvement in export demand. China bought 132,000 tons of U.S. beans Tuesday morning, the third business day in a row with an announced sale. Soybean meal and oil were lower on the fundamental implications of a large, potentially record, U.S. crop. CONAB says Brazil’s 2024 soybean crop totaled 147.382 million tons, down 4.7% from 2023.
Corn was lower on speculative and technical selling. Corn was also reeling from a record yield guess with the USDA projecting the third largest U.S. crop ever. 67% of the national crop is in good to excellent condition. The USDA also lowered planted and harvest area, with further adjustments possible in coming reports. The department might have lowered new crop ending stocks, but the projection remains above 2 billion bushels for now, blunting some of the demand bullishness. The USDA currently has 2024/25 demand at 14.965 billion bushels. Mexico purchased 137,160 tons of 2024/25 U.S. corn. CONAB did lower its corn outlook for Brazil slightly, while raising exports. Total production is pegged at 115.649 million tons, 0.2% less than July and 12.3% under 2023, with a first crop of 22.962 million tons, a decrease of 2% on the month and 16.1% on the year. CONAB made a month-to-month increase for the second crop, up 0.3% to 90.285 million tons, but that would still be down 11.8% from a year ago, with the harvest around 90% complete. Third crop corn in Brazil is seen at 2.402 million tons, 0.3% lower than last month, but 11.5% higher than last year. CONAB’s updated outlook for Brazil’s crops is September 12th, the same day as the USDA’s next supply, demand, and production reports. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.
The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis mostly steady to firm. The U.S. spring wheat rating dipped but remains well above a year ago and while the number might come down, the USDA is projecting a record yield. The stretch of hot temperatures and scattered rainfall also caused at least some stress to spring wheat in parts of Canada. The U.S. winter wheat harvest is essentially wrapped up for the year, except for parts of the Pacific Northwest. The USDA did make some changes to global production numbers, including cutting the outlook for the European Union primarily on crop weather issues in Germany and France, but other reductions were less aggressive, with the department likely waiting on more yield results out of Russia and Ukraine. There could also be a cut in the future for Argentina due to cold, dry weather faced during planting and early development in some areas. The USDA did raise the outlook for Australia. CONAB estimates Brazil’s winter wheat crop at 8.837 million tons, 1.3% less than in July, but 9.1% more than 2023. Egypt purchased 280,000 tons of wheat out of their 3.8-million-ton tender, with some sellers put off by the credit terms. Egypt bought 180,000 tons of wheat from Ukraine and 100,000 tons from Bulgaria.
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