Market News

Soybeans rally on supply, demand

Soybeans were higher on commercial and technical buying. The nearby supply remains tight, demand looks good, and USDA did lower the production estimate Wednesday. Unknown destinations bought 110,000 tons of 2011/12 U.S. soybeans ahead of the open and recent rains have caused harvest delays in some areas. Soybean meal was up and oil was mixed on a combination of spillover from soybeans and traders getting ready for the monthly NOPA crush numbers. The average estimate for the crush is 118 million bushels with soybean oil stocks at 2.139 billion pounds. India issued a tender for 1,500 tons of crude soybean oil and South Korea is in the market for 28,500 tons of U.S. soybeans. According to China’s General Administration of Customs, September soybean imports were 4.13 million tons, 8% less than August and 11% below September 2010. USDA’s weekly export sales report is out Friday at 7:30 AM Central. Soybeans are pegged at 500,000 to 800,000 tons, meal is seen at 75,000 to 225,000 tons, and oil is placed at 5,000 to 10,000 tons.

Corn was modestly lower on fund selling, in addition to the outside market direction. There was also follow through from Wednesday losses, but the downside was limited by slow farmer selling. Even though they were both considered old news after being rumored earlier this week, China bought 900,000 tons of 2011/12 U.S. corn outright and unknown destinations picked up another 292,110 tons of 2011/12. Ethanol futures were mixed. UkrAgroConsult states Ukraine’s grain exports for October 1 through 8 totaled 201,000 tons, about half of what they were during the same period in September, with 150,900 tons of that corn and 50,500 tons wheat. China’s National Grain and Oils Information Center sees domestic corn production at 184.5 million tons with USDA’s projection at 182 million tons and U.S. Grains Council’s most recent guess at 167 million tons. China’s General Administration of Customs reports corn exports for September were 10,200 tons, down 23% on the month but up 77% on the year. The Buenos Aires Grain Exchange says 30.5% of Argentina’s corn crop is planted. Weekly U.S. corn sales are estimated at 700,000 to 1.1 million tons.

The wheat complex was lower on commercial and fund selling, along with spillover from the outside markets. As much as anything, Wednesday’s USDA supply and demand numbers confirmed the bearish global fundamentals, and Kansas City picked up additional pressure from the easing of drought conditions in key hard red winter growing areas. Japan bought a small amount of U.S. wheat but aside from that, there was no real fresh news; Tokyo picked up 31,558 tons of U.S. hard red winter and 23,780 tons of U.S. western white, along with 44,785 tons of Canadian western red spring and 29,040 tons of Australian standard white. European wheat was lower, following the lead of the U.S. trade. Ukraine’s Ag Ministry reports 87% of the grain harvest is complete at 44.4 million tons and Kazakhstan’s Ag Ministry states their grain harvest is 94.6% finished at 26.2 million tons. According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is developing well thanks to recent rainfall with production expected to total 12.6 million tons. Weekly U.S. wheat sales are projected at 300,000 to 500,000 tons.