Market News

Soybeans up ahead of China talks, watching weather

Soybeans were modestly higher on short covering and technical buying. Beans remain optimistic about China, even with no confirmation of recent export rumors and some questions about upcoming talks. China is reportedly allowing new tariff waivers on U.S. soybeans ahead of that next round of negotiations. COFCO, a Chinese commodity trading firm, expects a big decline in soybean purchases from Brazil because of the continued spread of African swine fever, but also anticipates increased corn imports. U.S. soybeans continue to maintain a significant price discount to South American suppliers. Stateside, development remains slow and the good to excellent rating was unchanged on the week. Soybean meal and oil were modestly higher, following beans. The trade is also watching planting conditions in Argentina and Brazil.

Corn was steady to modestly higher. The USDA’s condition rating for corn was up 1%, even as development and harvest stay slower than average, with more delays expected in some areas this week. Corn is waiting to see what happens with Japan and the USMCA. The proposed trade deal with Japan could be signed this week, while the enaction of the USMCA doesn’t seem to be happening any time soon. The USDA reported, a day late, Mexico bought 200,000 tons of 2019/20 U.S. corn. Ethanol futures were mostly lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The industry is still waiting for details on the White House’s biofuels plan. Reports have the EPA granting some small refiners full biofuel waivers even as the Department of Energy recommended partial waivers.

The wheat complex was mixed. Chicago and Kansas City were mixed on spread adjustments, watching winter wheat planting, mostly expecting another week of mixed progress in the southern and southwestern U.S. Plains. Minneapolis was supported by the slower than average spring harvest and crop quality concerns following recent heavy rainfall in the northern U.S. Plains. Parts of Canada have experienced similar weather. The USDA’s small grains summary and quarterly stocks numbers are out Monday, September 30^th. New supply, demand, and production numbers are due October 10^th. DTN says Turkey is tendering for 32,000 tons of durum wheat but Taiwan rejected offers for U.S. milling wheat, citing price.