Market News

Soybeans, corn edge higher as harvest advances and trade talks loom

Soybeans were higher on commercial and technical buying. Support was tied to the optimism about tariff talks with China and the potential for trade aid. Still, those tariff discussions are a few weeks away and that potential trade aid has been thrown into question by the current partial shutdown of the federal government. Additionally, cash basis levels in some areas are rising for soybeans, and corn, a sign of improving demand. Beans are also watching the U.S. harvest and planting in South America, expecting generally good overall near-term progress on both continents. CONAB’s next round of projections for Brazil is out October 14^th, but it looks like the shutdown will either push back or cancel the USDA’s supply, demand, and production update originally scheduled for the 9^th. Soybean meal futures were mixed with nearby contracts up and deferred months down on spread trade. Bean oil was supported by demand expectations and the higher movement in crude oil during the session.

Corn was modestly higher on commercial and technical buying. Forecasts into mid-month generally look warm and dry for much of the region, helping the harvest. In South America, there’s rain in the forecast for some of the dry portions of Brazil and planting conditions in Argentina mostly look favorable. Ethanol production was up on the week, and stocks were down. The U.S. Energy Information Administration says production averaged 1.071 million barrels per day, rising 76,000 on the week as seasonal maintenance ends and 33,000 on the year, with stocks of 22.72 million barrels, 44,000 less than last week, but 566,000 more than last year, and exports of 138,000 barrels per day, 50,000 higher than the week before, but 3,000 lower than a year ago. The EIA says it will continue to issue reports until further notice during this government shutdown.

The wheat complex was firm to modestly higher on short covering and technical buying. Recent rainfall in the Midwest and Plains has delayed winter wheat planting in some, but the soil moisture recharge is beneficial as the crop inches towards dormancy. Updated drought monitor numbers are out Thursday. Unofficial estimates have about half of the crop planted. While wheat is oversold, any sustained upside might be limited by growing global supplies following larger crops in Canada, Europe, and Russia, with the potential for rising production year-over-year in Argentina, Australia, and Ukraine. The big issue in the Black Sea region right now is dry weather in southwestern Russia, which was missed by the recent scattered rainfall in the area. The USDA will not issue an export sales report for the second week in a row due to the government shutdown.