Market News

Corn gains, soybeans rally after USDA numbers

Soybeans were higher on commercial and technical buying after a wide-ranging session, closing higher for the week as well. There was an initial bearish reaction after the USDA raised U.S. production, yield, and old and new crop ending stocks estimates, but that pressure eased shortly after. Those increases in production and yield were despite weather issues and reduction in acreage following a resurvey in the northern Plains. The USDA cut both planted and harvested area by 300,000 acres. In the domestic supply and demand numbers, month-to-month, for new crop, exports and residual use were up, while the average estimated farm price was down. Globally, USDA did raise world ending stocks and production, but the overall changes were minimal. Soybean meal and oil were up on commercial buying. Bean meal saw continued support from strong domestic cash demand, while that commercial buying helped bean oil shrug off the drop in crude oil. China’s National Grain and Oil Information Center says their domestic crush volume fell below expectations last week due to poor margins. Beijing has lowered their new crop soybean import estimate to 91 million tons, while the USDA kept its outlook steady at 95 million.

Corn was higher on commercial and technical buying, adding to the weekly gains. Old crop ending stocks were up on the month, but production, yield, and new crop ending stocks were lower. Those yield and production numbers are expected to fall further with the USDA’s first field-based projections of the season out September 12^th. On the domestic side of things, for new crop corn, there was a slight increase in food, seed, and industrial use against a cut for feed and residual use, with the average estimated farm price holding steady. Globally, USDA did raise the export outlook for Ukraine, but that is highly tentative. China and Brazil are reportedly working to speed up their corn trade timeline due to China’s tensions with the U.S. and the uncertainties about Ukraine, including the quality of Ukraine’s stored grain. That first Ukrainian shipment of corn is trying to find a home after being rejected by Lebanon.

The wheat complex was mixed, while ending the week higher. All wheat production was up slightly from July, with higher spring wheat canceling out lower winter wheat. U.S. ending stocks were below a month ago, with the USDA expecting an improvement in export demand. On the global side of things, the USDA made month-to-month cuts in production for Argentina, the European Union, and India, while raising the outlooks for Australia, Canada, and Russia. The first ship loaded with wheat since Russia’s invasion has left one of Ukraine’s Black Sea ports, headed for Turkey. Most of the shipments allowed to leave under the agreement brokered by the U.S. and Turkey have been corn or sunflower products.