Market News

Corn up, soybeans down in return from holiday weekend

Soybeans were lower on fund and technical selling. China is reportedly locking down more cities due to COVID concerns and soybean products were lower on demand questions. U.S. weather forecasts during these later stages of development generally favor eastern growing areas over western portions of the region. The USDA says 57% of U.S. soybeans are in good to excellent shape, unchanged from last week, with 94% at the pod setting stage, compared to the five-year average of 96%, and 10% dropping leaves, compared to 14% on average. IHS Markit projects the 2022 U.S. soybean crop at 4.471 billion bushels with an average yield of 51.3 bushels per acre, both down slightly from August. Export inspections for the week ending September 1^st were up on the week and the year, with China and Mexico topping the list. Egypt’s government says it has nearly 6 months of vegetable oils in reserve. Argentina has raised its exchange rate for soybeans to encourage farmer selling.

Corn was higher on short covering and technical buying. Corn is watching late U.S. development weather, expecting the USDA to lower the yield estimate next Monday. That will be the first field-based production and yield numbers of the season and will likely include at least some acreage adjustments in the major crops. As of Sunday, 54% of U.S. corn is called good to excellent, steady, with 92% at the dough making stage, 63% dented, and 15% mature, all slower than normal. Early harvest activity continues to roll on in parts of the southern Corn Belt. IHS Markit estimates 2022 U.S. corn crop at 14.04 billion bushels with an average yield of 171.6 bushels per acre, less than what the USDA was expecting last month. There was also support from spread trade against soybeans. Corn export inspections were below the prior week, but above a year ago, mainly to China and Mexico. The new marketing year for corn, and soybeans, started September 1^st. Russia reportedly destroyed a major Ukrainian grain silo over the weekend.

The wheat complex was mixed with Chicago and Kansas City up on short covering and Minneapolis mostly lower on bear spreading. Wheat is oversold, with hot, dry weather in the forecast for the southern Plains ahead of widespread winter wheat planting. The USDA says 3% of the new winter wheat crop is planted, matching the five-year average. For spring wheat, 71% is harvested, compared to 83% on average. The dollar made new highs during the session, further limiting U.S. competitiveness on the export market. Last week’s export inspections were lower than the week before, but higher than a year ago, with Mexico and South Korea leading the way. One quarter into 2022/23, wheat inspections are behind the 2021/22 pace. Ukraine and Russia continue to hold edges over most major exporters due to price. Egypt’s government says it has almost 7 months of wheat in state reserves.