Market News

Soybeans, corn lower on higher crop ratings

Soybeans were lower on commercial and technical selling. The USDA’s crop condition rating improved last week, when most had been expecting at least some decline because of drier than normal conditions in some areas and the continued impact of wet weather earlier in the season. Still, development’s slow and there are a lot of questions about China ahead of the resumption of negotiations. For now, U.S. and Chinese tariffs remain in place and the recent rhetoric doesn’t seem that optimistic. The additional demand wildcard continues to be the spread of African Swine Fever in China. Soybean meal and oil followed beans lower. The National Oilseed Processors Association says member firms crushed 148.8 million bushels of soybeans during June, down on the month and year and below expectations, for the lowest monthly total in more than a year and a half. Brazilian soybean sellers are reportedly lowering offers because of higher freight rates.

Corn was modestly lower on commercial and technical selling. The U.S. corn rating also improved, including gains in some of the lowest rated states. Most forecasts have a cooler pattern after expected hot, dry weather through the weekend. Parts of Illinois, Missouri, and the southern Corn Belt have recently received rain from Tropical Storm Barry, but parts of those states, along with portions of Iowa and Nebraska, have growing dry spots. There continues to be a lot of uncertainty about this year’s crop because of the historically slow pace of planting, wide swings in weather during the growing season, and some forecasts calling for an early frost. The USDA’s acreage resurvey results and prevent plant numbers are out August 12^th. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Ukraine’s ProAgro projects 2019 corn production at 34.52 million tons. Ukraine has become a competitor for the U.S. on the export market.

The wheat complex was modestly lower on commercial and technical selling. The winter wheat harvest advanced last week and while the spring wheat rating was down, the crop is still in better than average condition. The fundamental outlook remains bearish because of the relatively high U.S. price and projected available world supply. That said – the fundamentals could at least move closer to neutral if crop damaging weather continues in parts of Australia, Europe, Russia, and Ukraine. Parts of the Canadian Prairies have recently received beneficial rainfall. The Rosario Grain Exchange estimates Argentina’s 2019/20 wheat crop at 21.5 million tons and while planted area was short of expectations, it was still the highest in nearly two decades. Ukraine’s ProAgro has wheat production at 24.7 million tons, IKAR pegs Russia at 77.5 million, and the German Association of Coops sees their crop at 23.85 million tons. DTN says Taiwan is tendering for 90,000 tons of U.S. milling wheat.