Market News

Soybeans, corn, wheat up to start September

Soybeans were higher on fund and technical buying. The trade is expecting recent warm, dry weather in much of the region to have at least some impact on yields. The USDA says 94% of the U.S. crop is at the pod setting stage and 13% is dropping leaves, both ahead of the respective five-year averages, while 65% of soybeans are rated good to excellent, down 2% on the week. China bought 132,000 tons of new crop U.S. soybeans. That’s the second business day in a row with a new crop U.S. soybean sale to China for a running total of 264,000 tons. The new marketing year for soybeans, and corn, started Sunday, September 1^st. With just a few reporting days remaining in 2023/24, soybean export inspections were up on the week and year, mainly to China and Mexico. Soybean meal was up and bean oil was down on the adjustment of product spreads. Bean oil saw additional pressure from a drop in canola oil futures after China announced the start of an anti-dumping probe into imports from Canada. The USDA says 193 million bushels of soybeans were crushed in July 2024, topping pre-report expectations and an increase of 9 million from the previous month and 8 million from last year. Meal and oil production also rose year-over-year, while product stocks tightened. The trade also has an eye on South America ahead of widespread planting. StoneX estimates Brazil’s 2024/25 crop at 165.04 million tons, while Celeres sees production at 169.9 million tons. CONAB’s updated outlook for Brazil is out September 12^th.

Corn was higher on fund and technical buying. Corn continues to monitor late development conditions and early harvest activity. As of Sunday, 90% of corn is at the dough making stage, in-line with the average, while 60% has dented and 19% is mature, faster than normal, with 65% of the crop called good to excellent, unchanged, but with 1% moving down from excellent to good. First crop planting is underway in Brazil, reportedly about 8% complete, while Argentina’s corn planted area could be down sharply on the year due to pest and weather issues. Celeres sees Brazil’s combined 2024/25 corn crop at 134.1 million tons, while StoneX pegs the first crop at 24.96 million tons. Lower water levels have sent Mississippi River freight costs higher and there are questions about rail movement because of labor issues in Canada. U.S. export inspections were above the previous week and last year, primarily to Mexico and Japan. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday, pushed back a day by Monday’s holiday. For July 2024, the USDA says 473.504 million bushels of corn were used for ethanol production, up 6% from June and 4% from July 2023, with DDGS production of 1,999,536 tons, an increase of 11% on the month and 12% on the year. In 2023, 5.3 billion bushels of corn were used for ethanol production, 2% more than 2022, while DDGS production was 21.003 million tons, 3% less than the year before.

The wheat complex was higher on fund and technical buying. Wheat is a little oversold and there’s talk Ukraine will limit wheat exports during the 2024/25 marketing year. That and smaller crops in Russia and Europe could boost demand for U.S. supplies further, with the 2024/25 pace already ahead of 2023/24. SovEcon lowered its guess for Russia’s wheat crop to 82.5 million tons, citing lower than expected yields in some areas. There are also some early concerns about production in Argentina. The Buenos Aires Grain Exchange says 44% of the crop is in good to excellent condition, compared to 39% the previous week, but dry weather is a continued issue in some areas. Stateside, the trade is monitoring spring wheat harvest conditions and weather ahead of widespread winter wheat planting. According to the USDA, 70% of spring wheat is harvested and 2% of winter wheat is planted, both matching the normal paces. Australia’s ABARES estimates wheat production at 31.8 million tons, compared to the last guess of 29.1 million tons. Nearly a quarter into 2024/25, U.S. wheat export inspections remain ahead of the needed pace to meet USDA projections, with Mexico and the Philippines topping last week’s list.