Market News

Soybeans up ahead of China talks

Soybeans were modestly higher on short covering and technical buying. The trade is waiting to see what happens with China when talks resume Tuesday. There’s been more talk of China buying U.S. ag goods, but no official announcements. Tariffs remain in place and President Trump has threatened more if negotiations don’t go well. China was the top destination in the weekly export inspections report. That said – the pace continues to trail last marketing year and there are a significant amount of U.S. beans yet to be shipped, some of which might be rolled over into 2019/20. Stateside, the crop is being watched closely as the calendar turns to August. As of Sunday, 57% of U.S. beans are blooming, compared to the five-year average of 79%, and 21% are at the pod setting stage, compared to 45% on average. 54% of the crop is rated good to excellent, unchanged, but with 1% moving from good to excellent. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying. Weather forecasts early this week for most of the Corn Belt look generally non-threatening, with some rain early and cooler temperatures. Most of the region is expected to stay dry as the crop gets closer to key development phases. The USDA says 58% of U.S. corn is silking, compared to 83% on average, and 13% is at the dough making stage, compared to 23% usually in late July. The USDA’s next set of supply, demand, and production estimates is out August 12^th and will include resurvey results and prevent plant totals. Weekly export inspections were bearish with about a month left in the marketing year. The big issue continues to be increased competition from Argentina, Brazil, and Ukraine. China was the on the destination list. China doesn’t buy a lot of corn, much less U.S. corn, but this could be viewed as a good faith measure ahead of negotiations. U.S. ethanol, DDGS, and sorghum are also potential purchase targets for Beijing. Weekly sorghum inspections were bearish. Ethanol futures were steady to firm.

The wheat complex was up on short covering and technical buying. The end of the winter wheat harvest is in sight and spring crop conditions are mostly good. For winter wheat, 75% of the crop is harvested, compared to 86% on average. For spring wheat, 97% of the crop is headed, just behind normal, and 73% of the crop is called good to excellent, down 3%. The trade is also watching weather issues in some key export competitors, including parts of Canada, Europe, and the Black Sea region. Some damage has occurred but timely rainfall in Russia, northern Europe, and the Canadian Prairies would help and most areas are expected to see cooler temperatures this week. Even with lower production projections, it’s still going to be a large world crop and global ending stocks could end up being just about unchanged from last marketing year. DTN says Jordan is tendering for 120,000 tons of milling wheat. Weekly export inspections were bullish, staying ahead of last marketing year, with Mexico the single biggest destination.