Market News

Commercial demand supports soybeans, corn, wheat

Soybeans were higher on commercial and technical buying, with September breaking through what had been resistance at $15. Domestic crush margins are strong and soybean meal was higher, supported by solid interior cash demand. Soybean oil was lower for much of the session, following crude oil, but rallied on global vegetable oil demand. Near-term development weather looks non-threatening in much of the region, but some areas do need rain and there is a chance of hotter, drier conditions in September. The USDA says 57% of U.S. beans are in good to excellent condition, down 1%, with 97% of the crop blooming, matching the five-year average, and 84% at the pod setting stage, compared to 86% on average. It’s unlikely this year’s soybean crop will hold onto the record average yield projected by the USDA earlier this month, with the big question being how much will be trimmed off that estimate. Soybean export inspections were down on the week, up on the year, with China and Mexico leading the way. Egypt’s supply ministry says that nation has six months of vegetable oils in strategic reserves.

Corn was modestly higher on commercial and technical buying. Corn was watching development weather and getting ready for the USDA’s weekly crop progress and condition report. As of Sunday, 55% of U.S. corn is in good to excellent shape, 2% lower, with 97% silking, 75% at the dough making stage, and 31% dented, all behind the respective average paces, and 4% mature, matching the normal rate. The USDA’s first field-based yield projection of the season is out September 12^th. Hot, dry weather is having an impact on crops in parts of Europe and China, which could open the door to new U.S. export demand. Heading into the end of the marketing year, export demand for U.S. corn has tailed off, partially due to price and seasonal demand shifts, in addition to a trade agreement between China and Brazil and the resumption of exports through the Black Sea from Ukraine. U.S. export inspections were above a week ago, but below a year ago, with Mexico and China topping the list.

The wheat complex was higher on commercial and technical buying. The gains were despite strength in the dollar, which makes U.S. goods more expensive on the export market. Less than a quarter into the marketing year, 2022/23 inspections trailed 2021/22, with last week’s inspections higher than the prior week, but lower than last year, mainly to Japan and Mexico. The U.S. winter wheat harvest is nearly over as the spring wheat harvest is advancing. For winter wheat, that harvest is at 95%, compared to 97% on average. For spring wheat, 64% of the crop is rated as good to excellent, unchanged, with 33% harvested, compared to 54% on average. The trade is waiting to see when the uptick in wheat shipments from Ukraine starts, but that’s dependent on several factors, including the quality of grain held in storage during Russian attacks on ports. The Ukrainian Agrarian Council does not expect that nation’s production to be larger than 60 million tons, below the current projection from the Ministry of Agriculture. Russia’s invasion has not only delayed exports, but also the winter grain harvest and new crop planting. Egypt’s supply ministry says that nation has purchased 4 million tons of domestically produced wheat and has seven months that crop in strategic reserves.