Market News

Corn, wheat both see a slight bounce

Soybeans were mostly lower, adjusting spreads. Beans are watching development conditions, with rain in the near-term forecast for some of the drier parts of the Midwest and Plains. Still, some of those areas are expected to see a return to hot, dry weather following the rain, probably causing at least some stress. China bought 131,000 tons of U.S. new crop beans, the 10^th business day in a row with a sale for a running total of 2,304,200 tons. All but 200 tons of that is new crop and all of those announced sales have been to China or unknown destinations, and unknown could turn out to be China when it’s time for delivery. The demand is because of competitive U.S. prices. The USDA’s weekly export sales numbers are out Thursday morning, while the 2021/22 marketing year for beans starts September 1^st. Soybean meal was mostly lower, following the lead of beans, and bean oil was down on follow through selling and spillover from global vegetable oils.

Corn was modestly higher on fund and technical buying. Corn is also watching the weather, with the rain in western areas expected to help conditions, if they materialize. Rain is in the forecast for some eastern areas as well, including some areas that already have adequate to surplus soil moisture. Crop tours are ongoing ahead of the next USDA production guess on September 10^th. Corn, and soybeans, will need a trend-line yield or better to meet demand expectations and limit further price inflation for end users. After the supply, demand, and production update, the next major report for corn will be the quarterly grain stocks numbers out September 30^th. U.S. export demand has slipped a little heading into the end of the marketing year, but U.S. prices remain below not only corn from Brazil, but also some feed wheat. ANEC says Brazil exported 4.52 million tons of corn in July. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 973,000 barrels a day, the lowest weekly average since April and down 13,000 on the week, but up 47,000 on the year. Stocks were a five-week low at 21.558 million barrels, a decrease of 718,000 from the previous week, but an increase of 1.288 million from a year ago.

The wheat complex was modestly higher on fund and technical buying, at least a little oversold after Tuesday’s drop. The rain in the Plains is too late to help spring wheat but will recharge soil moisture ahead of winter wheat planting. The same issues that have plagued U.S. spring wheat are also expected to limit white winter wheat planting in the northwestern U.S. Plains if there’s not sufficient soil moisture. The trade is also watching condition concerns in Canada, Europe, and Russia. There’s talk that Russia could further restrict exports, potentially boosting demand for U.S. wheat. Ukraine is also expected to pick up some of that slack. APK Inform estimates Ukraine’s wheat crop at 28.79 million tons, about 4 million more than in 2020. DTN says Algeria bought 200,000 tons of milling wheat, while Egypt and Japan are both tendering for unspecified amount of wheat. There are a few other open tenders, but it remains to be seen how much of that will be picked up by the U.S.