Market News

Soybeans soar, supported by demand, weather

Soybeans were sharply higher on commercial and technical buying. Some key U.S. growing areas will remain dry with probable stress in some key U.S. growing areas. Parts of the region will receive rain, but it might miss some of the drier areas, and while temperatures are expected to be cooler, some yield loss has likely occurred. Additionally, some of the Delta crop has or could be damaged as Tropical Storm Laura moves further inland. Weekly new crop export numbers were bullish, fueled by demand from China and unknown destinations. Still, overall sales to China continue to fall short of what’s needed to meet Phase One Agreement obligations. Soybean meal and oil were higher, supported by commercial buying. The International Grains Council estimated global 2020/21 production at 373 million tons, compared to the July guess of 365 million, largely on expectations for the U.S., and the 2019/20 total of 339 million tons.

Corn was higher on commercial and technical buying. Corn is also watching the weather and while some areas will see rain, it might not be enough to break the drought in parts of the region. Drought conditions have expanded in Iowa, parts of which were also impacted by last week’s derecho. The USDA will likely trim yield and production expectations September 11^th. China and unknown destinations bought 747,000 and 140,000 new crop U.S. corn, respectively, bringing the week’s total for announced sales to 1,395,000 tons. Weekly new crop export sales were strong, but old crop shipments fell short of what’s needed to meet projections for the current marketing year. Ethanol futures were lower. Brazil will reportedly temporarily remove import tariffs on corn, soybeans, and rice to limit domestic price inflation. The International Grains Council estimates 2020/21 world corn production at 1.166 billion tons, compared to 1.164 billion last month and 1.121 billion last marketing year.

The wheat complex was higher on commercial and technical buying, along with the lower dollar index. China did buy a routine amount of U.S. wheat last week and there’s continued talk of more new demand. Nothing has been announced by the USDA, but by that same token, last week’s sales weren’t announced either. Physical shipments of wheat were more than what’s needed to meet projections for the 2020/21 marketing year. More spring wheat harvest delays and quality concerns are probable because of rain in the northern U.S. Plains. Winter wheat harvest activity is nearly wrapped up, so Chicago and Kansas City are monitoring planting conditions for the new crop. DTN says Japan purchased 100,956 tons of food wheat from the U.S. and Canada, while Jordan purchased 60,000 tons of wheat. The International Grains Council expects the 2020/21 global crop to be 763 million tons, compared to 762 million a month ago and the 2019/20 total of 762 million tons. Agritel left its 2020/21 production estimate for France unchanged at 29.22 million tons but cut exports by 40% following rain during planting and drought during development.