Market News

Wheat gives back part of recent gains

Soybeans were modestly lower on profit taking and technical selling, ending a fairly quiet trading day just above session lows. The trade is watching U.S. harvest activity, expecting generally good progress ahead of more delays over the couple of weeks in some key U.S. growing areas. Beans are also monitoring the planting paces in Argentina and Brazil. Brazil’s pace remains ahead of average with a national election next week. The uncertainty about acreage in Argentina is connected to Buenos Aires’ recent extension of export tariffs. The ongoing trade tensions with China are also a continued bearish factor. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was modestly lower on fund and technical selling after a two sided session. Corn is also keeping an eye on harvest conditions in the U.S., along with planting activity in South America. Japan bought 230,000 tons of U.S. corn for delivery this marketing year. Japan is the second biggest buyer of U.S. corn, following Mexico. The USDA’s next export sales report is out this Thursday at 8:30 Eastern/7:30 Central and new supply, demand, and production numbers are due next Thursday at Noon Eastern/11 Central. Ethanol futures were steady to weak. The U.S. Energy Information Administration says ethanol production last week averaged 1.015 million barrels, down 21,000, while stocks were 23.445 million barrels, up 816,000.

The wheat complex was modestly lower on profit taking and technical selling, unable to follow through on the early gains. Crop concerns continue in Canada, Europe, the Black Sea region, and Australia, but the fundamental outlook remains bearish. Also, the U.S. Dollar index was higher, further limiting export competitiveness. There’s more chatter about Russia limiting exports, but those are still just rumor and, in any event, Moscow will probably deny any restrictions until they’re in place. Even then, the restrictions may just be de facto. Allendale does say Russia could suspend operations at 30 grain loading points in two ports because of complaints about sanitation issues. Minneapolis led the way initially on concerns about harvest delays and quality in Canada, along with expectations for some improvement in exports due to grading changes in the USMCA. Chicago and Kansas City continue to watch the U.S. winter wheat planting pace. Japan bought 22,730 tons of U.S. food wheat in a sell-buy-sell transaction.