Another round of weather support for soybeans
Soybeans were higher on commercial and technical buying. The trade continues to watch the weather and the likely stress from high heat and dry conditions. The heat should break this weekend in most of the region but is expected to return next week and many forecasts are mostly dry into September. The supply projection is already tight and could get tighter. The USDA’s next round of supply and demand estimates is out September 12th. Old crop soybean export sales were down on the week, but larger than average, mainly to Germany and Spain. New crop soybean sales were above a million tons for the fourth week in a row with unknown destinations and China leading the way. Those sales to unknown might end up being shipped to China. Soybean meal was higher and bean oil was lower, adjusting product spreads. Domestic crush demand remains solid and bean meal has benefited from improved export demand.
Corn was mixed on bear spreading. Weekly corn export numbers were bearish, reflecting the slow global demand, even as U.S. corn becomes more competitive on the world market. Old crop corn had a net reduction last week following a handful of cancellation, while new crop sales were decent, not great, primarily to Mexico and unknown destinations. The new marketing year for corn, and soybeans, starts September 1st. Both Brazil and Ukraine have taken a significant portion of export trade, especially with China. A major private U.S. crop tour this week has reported mixed yields, with the potential for further reductions in parts of the region. The Buenos Aires Grain Exchange is projecting a 2.8% increase in corn planted area for Argentina this year but says there could be some delays due to continued dry conditions in some areas. Conversely, rain is causing some second crop harvest delays in Brazil, while setting the stage for improved planting conditions for the upcoming first crop.
The wheat complex was lower on profit taking and technical selling. Export sales were up on the week, but the overall pace remains slow as Russia dominates global trade. Russia’s official prices might have risen, but some private exporters are offering wheat at reduced prices. Weekly U.S. wheat sales were up from a week ago and slightly higher than average, with Chile and South Korea topping the list. The trade is waiting to see if, or when, India follows through on rumored purchases of several million tons of wheat, with most of that expected to be sourced from Russia, which would change the global fundamentals significantly. Crop weather concerns in Canada, Argentina, and Australia were largely ignored. Wet weather during harvest is an issue in Germany. Consulting firm Agritel estimates France’s 2023/24 soft wheat exports at 17 million tons, compared to 16.4 million in 2022/23, but with smaller sales outside of the European Union.