Market News

Soybeans supported by solid demand

Soybeans were higher on commercial and technical buying. Contracts rebounded after Tuesday’s losses, and then some, and Mexico bought 167,370 tons of new crop U.S. beans. So far this marketing year, Mexico is the second biggest buyer of U.S. corn, after China. USDA expects record U.S. production, but they also expect continued strong demand. Soybean meal was higher and bean oil was lower on the adjustment of commercial product spreads. The National Oilseed Processors Association’s August report is expected to show member firms crushed 137.501 million bushels of soybeans, which would be the most for that month in a decade. The NOPA crush for July 2017 was 144.718 million bushels and the August 2016 total was 131.822 million.

Corn was steady to fractionally lower, unable to follow through on the early gains. Near term weather outlooks remain mostly dry, with warm temperatures, which should help maturation. That will also keep harvest moving in those areas where the crop has reached full maturity. At this point, it looks like the trade, and USDA, have locked in expectations for another big crop. Ethanol futures were steady to firm after the weekly U.S. Energy Information Administration numbers. Ethanol production last week averaged 1.047 million barrels a day, down 13,000 on the week, but up 43,000 on the year. Stocks were 21.132 million barrels, an increase of 16,000 on the week and 925,000 on the year. China this week announced plans to ramp up domestic ethanol production and use a 10% blend, nationally by 2020, drawing down their supplies and potentially opening up the door to new corn imports.

The wheat complex was mostly higher on spread trade and short covering. December Chicago did make a new four week high prior to drifting a little and settling closer to the session’s lows. Tuesday’s USDA numbers were neutral at best, with steady U.S. ending stocks and lower than expected, but still ample, world supplies. Also, the dollar was higher, which makes U.S. goods more expensive and less competitive on the export market. The spring wheat harvest is nearly over and winter wheat planting conditions in most of the Plains generally look good. South Korea is tendering for 65,000 tons of feed wheat. The USDA’s weekly export report is out Thursday at 8:30 AM Eastern/7:30 Central.