Market News

Soybeans, corn, wheat up ahead of Labor Day

Soybeans were higher on short covering and technical buying. It was a dry August in much of the region, leading to some concerns about yield. Still, a lot of Friday’s gains were end of the month, pre-holiday short covering as the trade is expecting a record yield, for now. Parts of the Midwest and Plains are expected to see rain this weekend, but coverage and totals are uncertain. There has been decent rainfall in some areas over the past week, but the precipitation has missed other areas, with about 12% of the U.S. crop impacted by drought. China bought 132,000 tons of U.S. beans and Colombia picked up 100,000 tons of bean meal. Both are for 2024/25 delivery, which starts September 1^st for soybeans, and corn, and October 1^st for soybean products. The decline in price has led to improved export demand for U.S. beans, but there’s still a lot of competition from Brazil. Farmer selling is reportedly picking up steam in Brazil due to currency weakness. Soybean meal was up, following beans, while soybean oil was mixed on bear spreading and general consolidation after its recent strength.

Corn was higher on short covering and technical buying. Corn is monitoring late development weather and early harvest activity, which is slowly, but surely, moving north. Early expectations are for the U.S. to trim its yield estimate at least somewhat in the next round of supply, demand, and production numbers, out September 12^th. U.S. corn is at a big discount to competing exporters, which should continue to support global demand, while feed and fuel use are also bullish. The potential for a lower yield and likelihood of continued strong demand could pull the USDA’s new crop corn ending stocks projection below the psychologically import 2-billion-bushel mark. There’s chatter that China could limit exports of several commodities, including corn, because of large domestic production and relatively slow demand. The Buenos Aires Grain Exchange is projecting a 17% decline in corn planted area for Argentina due to weather questions and pest problems. Early first crop corn planting is underway in parts of Brazil. Barge shipments on the Mississippi River reportedly declined over the past week as rates increased.

The wheat complex was higher on short covering and technical buying. Spring wheat yields have generally been good, but quality is an issue in parts of the northern U.S. Plains. That’s in addition to the quality issues in parts of the European Union, especially France and Russia, and the ongoing questions related to production in Russia and Ukraine following weather problems during key development phases. Additionally, there are some early weather concerns for Argentina, while Australia is expected to produce a big crop. The European Commission sees E.U. soft wheat production at 116.1 million tons, compared to the prior guess of 120.8 million tons. Egypt’s Prime Minister says that nation has six months of wheat on hand, but Cairo will reportedly purchase wheat if the price is right. Ukraine’s Ag Ministry says that since the start of the marketing year July 1^st, wheat exports are 3.4 million tons, well ahead of last marketing year.