Market News

Wheat moves higher, corn down, soybeans mixed

Soybeans were mixed, consolidating. Nationally, development is ahead of average, but most forecasts have a warmer, drier pattern in parts of the region starting later this week or early next week, depending on the area. That could cause some stress, possibly cutting yield potential, at least to some extent. A major crop tour ongoing this week has seen some early variability in pod counts. New crop export demand continues to show improvements after the recent decline in price, with U.S. prices very competitive for fall/winter delivery. Mexico purchased 239,432 tons and China bought 132,000 tons, both for 2024/25, which starts September 1^st. China continues to buy beans from Brazil as well, for both old crop and new crop delivery. From January to July, China bought 43.5 million tons of soybeans, with a mere 12.6 million tons from the U.S. Soybean meal was mostly lower and bean oil was mostly higher, with both adjusting spreads. Domestic crush margins remain bullish.

Corn was modestly lower on fund and technical selling. The U.S. crop is developing ahead of average and 5% of the crop has reached maturity. Widespread harvest activity is still weeks off and there are questions about how many acres will be harvested this year due to storm and flood damage at points during the growing season. A major tour this week could be hinting at some yield reduction by the USDA in coming months, but that variance is not all that uncommon because of differences in methodology and sample area. Some southern growing areas could see some late development impact from a warmer, drier pattern expected to be in full force by early next week. Losses were limited by solid feed, fuel, and export demand. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Basis levels in Brazil and Ukraine have moved higher, leaving U.S. corn as the most competitive corn supplier on the global market. Safras e Mercado says 95% of second crop in central and southern Brazil has been harvested, well ahead of both last year and the five-year average.

The wheat complex was modestly higher on short covering and technical buying, along with the lower trade in the dollar during the session. The U.S. spring wheat harvest is a little bit behind average due to recent heavy rain in parts of the northern Plains. That’s also impacted spring wheat conditions in parts of the Canadian Prairies. The U.S. crop is still in much better condition than this time last year and the USDA’s projecting a record yield, but conditions don’t always reflect actual production and that yield number could be trimmed in upcoming USDA reports. The USDA’s next round of supply, demand, and production numbers is out September 12^th. The trade is also monitoring a potential rail strike in Canada, which would impact movement. Additionally, crop weather issues have had at least some effect on yield and quality in France, Germany, Russia, and Ukraine, and could also be a concern in Argentina. Conditions are mixed, but generally favorable overall, in Australia. While there’s been more talk of India importing wheat due to high domestic prices, no business has been reported yet and it remains to be seen how much of that would be supplied by the U.S. Egypt’s government is indicating it intends to fill the rest of its 3.8-million-ton wheat tender by the end of the year.