Corn weak on profit taking
Soybeans were modestly higher on short covering and technical buying. Harvest is just ahead of average, with the trade expecting good progress in most of the Midwest and Plains this week, outside of some near-term delays in the northern Midwest. The USDA’s crop condition rating did dip slightly for soybeans over the past week, not uncommon as harvest ramps up, but still the worst rating for U.S. beans at this time of year in about a decade. Hot, dry conditions are limiting early planting progress in parts of South America. Portions of Brazil could see some relief this week and while Argentina has received some rainfall over the past few days, that precipitation has been scattered. Soybean meal and oil were up on short covering and solid crush margins. The USDA’s Quarterly Grain Stocks report, an important indicator of demand, is out Friday.
Corn was modestly lower on profit taking and technical selling. Corn is watching U.S. harvest activity, now at 15% complete, with the USDA’s condition rating up slightly on the week. Forecasts for the remainder of this week generally have light rain this week in the Corn Belt, causing only minor delays in most areas. Anecdotal yields for corn are a little bit better than expected in some areas. The USDA’s next round of yield and production estimates is out October 12th. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Barge freight values on parts of the Mississippi River have jumped sharply due to low water levels inhibiting movement. Corn is also watching planting conditions in South America.
The wheat complex was mixed. Russia has attacked another of Ukraine’s ports, this time on the Danube River. The recent attacks on Ukraine’s export infrastructure by Russia are disrupting trade for Ukraine, as Russia continues to hold a big chunk of the world wheat market due to a significant price advantage. Theoretically, the U.S. could pick up some of the business out of the Black Sea region, but practically, many buyers would balk at U.S. prices. The USDA is projecting a multi-decade low for U.S. wheat exports. U.S. winter wheat planting is behind the five-year average, while the spring wheat harvest should wrap up soon. The USDA’s Small Grains Summary report is out Friday. Globally, dry weather continues to be a concern in Argentina and Australia. Agriculture and Agri-Food Canada lowered its 2023/24 production estimate for that nation to 29.835 million tons.