Market News

Soybeans decline late

 

Soybeans were modestly lower on profit taking and technical selling, unable to follow through after the earlier gains. The trade does expect solid harvest progress in the near term. China bought 419,000 tons of U.S. beans and unknown picked up 113,000 tons, both for delivery during the current marketing year. Demand remains strong and even with a record crop, farmer selling continues to be extremely light. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Oil World projects Brazil’s soybean crop at 89 million tons, lower than their prior guess and less than what USDA is currently expecting.

Corn was modestly lower on fund and technical selling. Corn’s expecting solid harvest progress in most areas thanks to a generally better weather outlook. The trade does expect a record crop and fundamentals are bearish, but contracts are currently at a good relative value. Ethanol futures were lower. Ethanol production last week was 896,000 barrels per day, compared to 885,000 the week before. Stocks were pegged at 17.9 million barrels, compared to 18.4 million in the previous update. Crude oil futures closed at the lowest levels since June 2012.

The wheat complex was mostly modestly higher on short covering and technical buying. Wheat’s in an uptrend, but it’s coming without any real fundamental backing. The big bearish factor weighing on the complex remains the world fundamentals: namely, expected record global production and large projected ending stocks. Still, like corn, U.S. wheat, especially Chicago wheat, remains a solid relative value. Export demand remains light, with Egypt again bypassing U.S. wheat, buying 180,000 tons of wheat, 60,000 tons each from France, Romania, and Russia.