Market News

Soybeans, corn see modest bounces

Soybeans were higher on short covering and technical buying. Contracts bounced after the run to new lows following the USDA’s record crop and yield estimates. Parts of the region are expected to see a return to hotter temperatures, but the impact will depend on duration and severity. The recent longer-term decline has led to at least some improvement in export demand. There were no new sales announced Wednesday morning, breaking a streak of three consecutive business days, all to either China or unknown destinations, but U.S. prices are competitive for fall/winter delivery, even as Brazil maintains control for this summer. ANEC projects Brazil’s August soybean exports at 8.18 million tons, compared to the previous guess of 7.84 million. The USDA’s weekly U.S. sales numbers are out Thursday morning. Soybean meal was up on oversold signals and product spread adjustments. That product spread trade and a lower move in crude oil pressured soybean oil. Crush margins remain bullish. The NOPA’s member crush for July is seen at 182.367 million bushels, which would be up on the month and the year, while soybean oil stocks expected to be tighter.

Corn was modestly higher on short covering and technical buying. The USDA is projecting a record yield and while new crop ending stocks were down on the month, they still look very large at more than 2 billion bushels. While that does limit some of the bullish demand influence, the 2024/25 marketing year doesn’t get underway until September 1^st and stocks do tend to get tighter, unless demand collapses. U.S. corn is currently the cheapest feed ingredient on the global market, feed use is solid, and ethanol demand continues to be strong. The U.S. Energy Information Administration says ethanol production last week averaged 1.072 million barrels a day, up 5,000 on the week and 3,000 on the year, while stocks dipped to a four-week low at 23.354 million barrels, a decline of 413,000 from the previous week and 81,000 from a year ago. ANEC estimates August corn exports for Brazil at 6.68 million tons, compared to 6.29 million the week before. The USDA’s attaché in Ukraine sees 2023/24 corn production at 31.043 million tons, slightly above the official guess, with 2024/25 production at 26.2 million tons. Exports for the current marketing year, which runs through the end of September, are pegged at 28 million tons, potentially falling to 21.8 million tons next marketing year. Beginning stocks are expected to be sharply lower due to higher domestic consumption and lower production.

The wheat complex was mixed. Wheat is monitoring early U.S. spring wheat harvest activity and the tail end of the winter wheat harvest. The USDA is projecting a record spring wheat average yield and most of what’s left for the winter wheat harvest is in the Pacific Northwest. The trade is also keeping an eye on world crop weather issues impacting quality and overall production. That includes weather impacts in France, Germany, Russia, and Ukraine, and potentially Argentina. Conversely, production in Australia is expected to be above a year ago. The USDA’s next round of supply, demand, and production numbers is out September 12^th. The USDA’s attaché for Ukraine expects 2024/25 wheat production to hit 22.3 million tons, compared to the official estimate of 19.5 million and the 2023/24 total of 22.97 million tons. Exports for 2024/25 are pegged at 13.7 million tons, compared to 18.076 million in 2023/24, with significantly tighter supplies, partially due to higher domestic demand.