Market News

Soybeans down on tariff concerns, less threatening weather outlooks

Soybeans were modestly lower on fund and technical selling. Contracts followed through on Wednesday’s losses, with a slightly less stressful near-term weather forecast in many areas. Most of the dry areas are expected to remain dry through at least this weekend, but temperatures are expected to be at least somewhat more moderate than initially forecast. The trade’s also watching for any new developments with China. No public progress has been made in talks and any further discussions may be complicated by an expected higher set of tariffs on U.S. imports of Chinese goods. Soybean meal and oil were lower, following beans. Weekly old crop exports were bearish, with big cancellations by China and unknown destinations. Allendale says FC Stone projects 2018 U.S. soybean production at 4.574 billion bushels with an average yield of 51.5 bushels per acre. Brazil’s Ag Ministry says July soybean exports were 10.2 million tons, down 220,000 from June, but up 3.24 million from July 2017.

Corn was modestly higher on commercial and technical buying, ending the session near the low end of the day’s range. Corn received overnight support from European futures, with the potential for new export demand for U.S. corn if crop loss continues. The USDA’s next set of supply and demand numbers is out on the 10th, including the first field-survey based U.S. production estimate of the season. The crop is apparently in good shape overall, but condition ratings don’t tell the full story and more dry weather would probably limit the crop’s full potential. Ethanol futures were mostly steady. The USDA’s attaché in Argentina estimates 2018/19 corn production at 41.5 million tons, 500,000 more than the current official USDA guess, because of higher than anticipated harvested area. According to Allendale, FC Stone expects 2018 U.S. corn production to be 14.562 billion bushels with an average yield of 178.1 bushels per acre. Brazil’s Ag Ministry reports corn exports during July were 1.170 million tons, a big increase on the month, but a big decrease on the year.

The wheat complex was modestly higher on commercial and technical buying, unable to sustain some sharp midday gains. Wheat was also supported by higher European futures and the potential for more crop loss in north and central Europe, in addition to the Black Sea region. The trade is also watching weather in the U.S. Pacific Northwest, Canada, and Australia. The U.S. spring wheat harvest is just getting underway in many areas, while the winter wheat harvest could be close to completion in next Monday’s USDA update. According to wire reports, Ukraine’s Ag Ministry is not planning to directly limit milling wheat export sales. The USDA’s attaché for Argentina sees 2018/19 wheat exports at 13.6 million tons, 600,000 less than the last official projection from Washington D.C. The USDA office in Kazakhstan estimates 2018/19 wheat production at 14 million tons, down 800,000 from 2017/18 on lower planted area. Japan bought 47,178 tons of wheat from the U.S., along with 60,665 tons from Canada, and Iraq purchased 50,000 tons of wheat from Australia.