Market News

Yield uncertainties support corn and soybeans

Soybeans were higher on technical and speculative buying, along with some spillover from the outside markets. The dollar was weak while the Dow and crude oil were higher, breaking their recent losing streaks. The nearby supply remains tight and demand is strong with unknown destinations buying 110,000 tons of new crop U.S. beans ahead of the open. If that turns out to be China, that pushes Beijing’s U.S. purchases since June 20 to over 3 million tons. Additionally, the trade continues to keep very close watch on development weather with the vast majority of the crop in very critical phases of development. Given the already tight supply and those demand projections, there’s just not much room for crop loss. Soybean meal and oil were higher, following the lead of beans, with meal garnering additional support from its better supply and demand outlook.

Corn was higher on fund and technical buying, in addition to outside market direction. Demand looks good for corn with Japan picking up 121,920 tons of new crop U.S. early Tuesday. Also, there are concerns about late crop development in parts of the Midwest and Delta. Specifically, parts of the Delta, Southern Midwest and Eastern Cornbelt have been dry, while portions of the Central and Western Cornbelt has seen too much rain and in general, development has gone faster than average, which is not considered ideal for yields. The Pro Farmer crop tour continues this week. Ethanol futures were higher. In a statement posted to the website of Chinese state grain storage firm Sinograin Corp., via Dow Jones Newswires, chief of the Dalian Northern Grain Exchange Zheng Chunfeng states Chinese corn reserves are down sharply on the year as consumption outpaces supply.

The wheat complex was mostly lower on profit taking and consolidation trade. Ukraine says it will limit grain exports to around 3 million tons until the end of the year due to drought, joining Russia in restricting sales. India’s Trade Secretary, via Dow Jones Newswires, says New Delhi may end their wheat export ban if prices continue to rise. That said – there’s more drought-busting rain in the forecast for Russia, which is too late to help the summer crop but will aid winter planting, Canada’s expected to plant a record winter wheat crop this year and according to Allendale’s David Kohli, U.S. winter wheat planting should increase. Egypt bought a cargo of U.S. hard red winter and Japan issued a tender for 128,964 tons of wheat (70,143 tons U.S. dark northern spring, 31,694 tons Canadian western red spring and 27,127 tons Australian standard white). European wheat was lower with those traders also focusing on Russian rainfall; Paris November was down 3.2% and London November was 2.6% lower.