Market News

Corn, wheat supported by ending stocks

Soybeans were modestly higher on short covering and technical buying. The USDA’s 2018 production numbers are close to pre-report estimates, with crop conditions expected to remain generally non-threatening. Old crop stocks were smaller than expected, but new crop jumped, mostly on lower exports because of tariffs. Soybean meal was mostly firm, consolidating, while bean oil was lower on follow-through selling and bearish USDA numbers. Weekly export numbers on beans were neutral, while old crop meal established a new marketing year low. The premium of Brazil’s soybeans to U.S. beans has widened even further.

Corn was higher on commercial and technical buying. The USDA’s production guess was up from June, but below the average estimate, and the yield projection was unchanged. Weather will continue to be the critical domestic issue moving forward, with near-term conditions considered to be non-threatening, even if it is speeding up development in some key growing areas, while recent rainfall is harming crops in other areas. The USDA tightened the old and new crop U.S. balance sheets, when most analysts were expecting month to month increases. The USDA’s next set of supply, demand, and production numbers is out August 10th. Ethanol futures were higher. Weekly export numbers for corn were neutral, with 2017/18 sales ahead of 2016/17, but shipments trailing the last marketing year’s pace.

The wheat complex was higher on commercial and technical buying. The spring wheat production estimate is up sharply on the year, but the total wheat crop projection is lower. New crop U.S. ending stocks were higher, but the USDA lowered the new crop world guess more than expected. Overall, the outlook remains neutral to bearish, with the trade continuing to watch crop weather in North America, Europe, the Black Sea region, and Australia. Saudi Arabia is in the market for 595,000 tons of optional origin milling wheat and Bangladesh is tendering for 50,000 tons of optional origin wheat. July grain and oilseed contracts expire Friday.