Market News

Soybeans, corn droop as wheat sees good gains

Soybeans were sharply lower on profit taking and technical selling. The U.S. crop remains in very good shape overall, even with recent hot, dry weather in some areas. There are some areas of concern and yields could be a little bit lower in the next round of supply and demand estimates, but on the balance, the crop rating is above a year ago, and at this point, analysts are expecting record yield and production numbers. Export demand is solid, despite signs China’s economy is slowing. Still, part of the reason for the record shipments received by China during August, 12.14 million tons were due to delays earlier in the summer, skewing the numbers. The relatively cheap price of soybeans in Brazil was also a factor. Soybeans are also monitoring early planting activity in South America. CONAB’s updated projections for Brazil are out Thursday. Soybean meal and oil were lower on technical selling and the fundamental implications of a big soybean crop. Bean oil had additional pressure from Malaysia’s Palm Oil Board reporting palm oil stocks at six-month high.

Corn was modestly lower on profit taking and technical selling. 5% of the U.S. crop is harvested, with a chance for delays in some southern growing areas as Francine makes landfall. The USDA is expected to trim yields in Thursday’s production report, but, on average, that guess is expected to hold at record levels, at least until harvest gets into full swing. Some acreage adjustments are also possible in this round of numbers and the report will include field-based objective yield data. Food, fuel, and export demand continue to be solid positives for corn. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. IKAR reduced its corn guess for Russia to 12 million tons, which would be the smallest crop in several years. AgRural says 15% of Brazil’s first corn crop has been planted.

The wheat complex was firm to modestly higher on fund and technical buying. Winter wheat planting is close to average, but parts of the southwestern Plains need rain, which could impact planted area. The U.S. spring wheat harvest is in its late stages, with most of the northern U.S. Plains warm and seeing only scattered rainfall into next week. Improved export demand could lead to tighter U.S. ending stocks Thursday. The trade will also be watching global adjustments closely. Crop weather issues impacted yield and production for several key exporters including France, Germany, Russia, and Ukraine, and Canada has seen lower spring wheat yields than the U.S. for most of this year’s harvest. It’s likely too early for any adjustments to crops in Argentina and Australia. IKAR did lower its outlook for Russia’s wheat crop to 82.2 million tons and cut exports to 44 million tons.