Market News

Soybeans, corn up on weather concerns

Soybeans were higher on short covering and technical buying. Forecasts are hot and dry for most of the Midwest starting this weekend, potentially stressing the crop, and likely reversing the recent crop condition improvements. The USDA’s next set of yield and production estimates is out September 12^th in the monthly supply and demand update. Weekly old crop export sales were neutral to bearish, while new crop sales were neutral to bullish. The big buyers for old crop were the Netherlands and Indonesia and China and unknown destinations topped the list for new crop. New crop sales are off to a slow start because of the competition from Brazil, but have ticked higher with more competitive U.S. prices, at least for now. The new marketing year for soybeans, and corn, starts September 1^st. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Domestic crush margins remain bullish.

Corn was higher on short covering and technical buying. Corn is watching the weather and the potential for late season stress in some key growing areas. Demand for ethanol use is solid, canceling out some of the impact of slow export sales. Old crop sales were up sharply on the week, but shipments have been less than what’s needed to meet even the USDA’s recently downgraded projection, while new crop sales were below a week ago. The main purchasers for new crop were unknown destinations and Mexico, which flipped positions for new crop. APK-Inform sees Ukraine’s 2023 corn crop at 25.5 million tons, 2 million below the most recent USDA estimate, with potential 2023/24 exports of 18 million tons.

The wheat complex was lower on fund and technical selling. The trend remains lower due to slow demand, even with U.S. and world supplies projected at multi-year lows. Export sales were below the prior week, but slightly above average, mostly to Mexico and unknown destinations, with a small cancellation by Japan. The trade mostly ignored the ongoing Russia/Ukraine issues and the expected spring wheat harvest delays due to forecasted rain in the northwestern U.S. Plains. Russia has attacked Ukraine’s export infrastructure again this week, but there has been no appreciable slowdown in shipments due Russia’s continued dominance over the market. Ukraine is still exporting grain through the Danube River, but those shipments have slowed down following some recent damage. There’s been more talk but no official confirmation of India exploring buying wheat from Russia. APK-Inform estimates Ukraine’s wheat crop at 20.6 million tons, 400,000 less than the USDA, with 2023/24 exports of 12 million tons. Dry weather is an issue in parts of Argentina and Australia.