Market News

Corn up, soybeans down, watching weather

Soybeans were lower on speculative and technical selling, with the most active months settling towards the high end of the day’s range. Weather forecasts for most of the Midwest and Plains look non-threatening, with a big portion of the region expected to see rainfall over the next week. The trade does expect a record crop, but this crop isn’t fully made yet. As of Sunday, the USDA says 94% of U.S. beans are blooming and 79% are at the pod setting stage, both faster than normal, and 59% of the crop is in good to excellent shape, down 1%. Soybean meal and oil followed beans lower. Weekly export inspections have slowed as South America’s record crop continues to flow into the export pipeline, but it was another nominally bullish week. The 2016/17 marketing year for soybeans, and corn, wraps up at the end of August.

Corn was higher on short covering and technical buying. Corn’s also watching the weather and while rain is expected in dry parts of the Cornbelt, totals haven’t always matched up with forecasts this year. The USDA says 97% of U.S. corn is silking, 61% is at the dough making stage, and 16% has dented, all slightly behind their respective normal paces, and 62% of the crop is called good to excellent, up 2%. Export inspections were good, not great, with less than a month left in the marketing year. Ethanol futures were higher. The USDA’s attaché in London says the European Union’s grain harvest is “underway in most Member States”, with an estimated total of 300 million tons for 2017/18. AgRural says 83% of Brazil’s second corn crop is harvested, ahead of average. Brazil recently opened its first corn only ethanol plant.

The wheat complex was mostly lower. Kansas City and Minneapolis were pressured by forecasts for rain in parts of the Plains and the bearish fundamental outlook. Most of that precipitation should be in southern portions of the region, missing the driest parts of the northern Plains. Chicago was mostly firm, helped out by the late bounce in corn. For winter wheat, 97% of the U.S. crop is harvested, compared to 96% on average, with activity 95% to 100% complete in 14 of the top 18 production states. For spring wheat, 40% of the crop is harvested, but it’s a big question how abandonment has been factored in, and 33% of the crop is in good to excellent shape. DTN says South Korea bought 65,000 tons of optional origin corn and Iraq is tendering for 50,000 tons of wheat. SovEcon raised its 2017 wheat production estimate for Russia to 77.9 million tons and another Russian firm, IKAR, increased its outlook to 77 million to 80 million tons.