Market News

Corn sees slight bounce, soybeans weak

Soybeans were modestly lower on fund and technical selling. The USDA’s condition rating was unchanged on the week, with beans watching early harvest activity, expecting minor delays in parts of the Midwest and Plains. The trade is also monitoring early stages of planting in Argentina and Brazil. Portions of Argentina remain dry and parts of north and central Brazil are experiencing a hot, dry pattern. AgRural says 0.2% of Brazil’s soybean crop has been planted. As much as anything, Tuesday’s trade was a sign beans still have some downside potential, but it’ll take a couple of sessions with an established trend to really know. Domestic demand is solid and export sales have picked up a little steam in recent weeks. Soybean meal was higher and bean oil was lower, adjusting product spreads.

Corn was modestly higher on short covering and technical buying. Just over half of U.S. corn is rated good to excellent, with 20% of the crop in poor to very poor condition, while this year’s harvest slightly ahead of average. There is potential later this week for some harvest delays rain in portions of the Corn Belt. The USDA’s updated yield and production numbers are out October 12^th. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Ethanol and feed demand continue to be positives, canceling out some of the bearish influence of slow export demand. Brazil continues to be a major player on the export market and Ukraine is resuming its position in global trade. Both Brazil and Ukraine have taken on a bigger role in supplying corn to China. Corn is keeping an eye on planting conditions in South America and any potential shifts away from corn to soybeans. AgRural says 97% of the winter corn crop has been harvested in central and southern Brazil, with 21% of the summer crop planted.

The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis up. Expectations for generally favorable planting weather supported the winter wheat pits, while the spring wheat pit was supported by yield concerns in parts of the northern U.S. Plains. Wheat as a complex is oversold, but any upside will be limited by slow export demand, with the USDA projecting a multi-decade low for sales this marketing year. Weather issues in Argentina and Australia are largely being ignored because of the lesser role of the Southern Hemisphere in global trade. Russia continues to dominate the export market due to a significant price advantage and some grain is moving out of Ukraine. Attempts at resurrecting the Black Sea Grain Initiative have so far failed, with Ukraine currently using an alternative route along the western coast of the Black Sea.