Market News

Soybeans down, corn mixed, eyeing end of marketing year

Soybeans were lower on fund and technical selling. Large parts of the region have been dry since mid-August and could stay that way into mid-September. Combined with another round of forecasts for hot temperatures in much of the Midwest and Plains, that could cause stress and cost soybeans some yield potential. A portion of the losses was position squaring ahead of the end of the month and marketing year. The new marketing year for soybeans, and corn, starts September 1^st. Soybean meal was mixed, adjusting spreads, and bean oil was lower, following soybeans. Unknown destinations did buy 266,000 tons of 2023/24 U.S. beans Wednesday morning for a two-day sales total of 562,000 tons. The trade is also monitoring conditions in South America ahead of widespread planting.

Corn was mostly lower. Corn is watching the weather and the potential late season stress from another round of hot, dry conditions. It’s been a widely varied growing season in most of the Corn Belt and this weather pattern sets the stage for lower test weights and faster maturity. Low Mississippi River levels could impact barge traffic in the coming weeks. Rain in Brazil is delaying the second crop harvest but should help new crop planting. CONAB’s updated outlook for Brazil is scheduled for September 6^th. The U.S. Energy Information Administration says ethanol production last week averaged 1.007 million barrels a day, a decrease of 41,000 on the week but an increase of 37,000 on the year, both can be linked to margins, with stocks falling to a 41-week low at 21.609 million barrels. Ethanol exports were also below a week ago.

The wheat complex was mixed. Chicago was up on an oversold bounce, but gains were limited by the overall slow export demand for U.S. wheat. While soft red winter, the type traded in Chicago, is competitive strictly on a price basis, freight costs are cutting into demand. The USDA is projecting the tightest ending stocks in years along with lowest export total in decades, with weekly sales numbers out this Thursday and updated supply and demand numbers out September 12^th. Russia continues to hold a big chunk of the export market with some private offers coming in below Moscow’s official price floor. Cheaper European Union wheat from the Black Sea region is starting to cut into Russia’s advantage at least somewhat. Ukraine is having early success moving grain along alternative routes. Either way, Russia’s war in Ukraine will continue to lead to questions about both nations sustaining trade until there’s some resolution. Statistics Canada lowered its combined wheat production outlook to 29.47 million tons. Wheat is also keeping an eye on weather issues in portions of Argentina and Australia.