Market News

More losses for corn, soybeans, wheat

Soybeans were lower on fund and technical selling, with the most active months ending the week sharply lower and November notching a one-month low. China bought 456,000 tons of new crop U.S. beans Friday, the third day in a row with a sale, but the overall pace of sales remains slower than expected ahead of trade talks on the 15^th. China is buying U.S. beans, but is also still purchasing beans from Brazil as a hedge against the tensions with the U.S. China’s General Administration of Customs says Beijing bought 10.09 million tons of beans during July, down from the record amount in June, but above July 2019. Brazilian vegetable oils group ABIOVE estimates 2021 soybean production at 130.5 million tons with exports of 80 million tons. Stateside, while parts of the region do need rain, the trade is expecting a large crop this year. Soybean meal and oil were lower, following beans.

Corn was modestly lower on fund and technical selling, also ending the week in the red. Concerns about the drought and near drought conditions in parts of the Corn Belt are mostly canceled out by the large domestic supply and the possibility the crop could top 15 billion bushels, even with those weather woes. Slow export and ethanol demand are also bearish. The USDA’s new production and yield estimates are out on the 12^th, along with updated supply and demand projections. Ethanol futures were lower. The Buenos Aires Grain Exchange says Argentina’s corn harvest has ended with production of 50 million tons. If the current dry conditions in Argentina continue, it would impact new crop corn planting. Argentina is a competitor on the corn export market, along with Brazil, Russia, and Ukraine. ProAgro has Ukraine’s 2020 corn crop at 38.86 million tons, compared to the prior guess of 38.49 million.

The wheat complex was modestly lower on fund and technical selling, with September contracts at the three U.S. exchanges posting significant week to week declines. The main bearish factors continue to be the expected big world crop and potential record global supply, which should be reflected in next week’s USDA numbers. That pushed September Kansas City and Minneapolis to new contract lows and pulled September Chicago below $5. The U.S. winter wheat harvest is close to the finish as the spring wheat harvest ramps up speed. DTN says South Korea bought 57,400 tons of U.S. milling wheat and Pakistan purchased around 60,000 tons of wheat from an unnamed supplier. The Buenos Aires Grain Exchange says 98.3% of Argentina’s wheat crop is planted, compared to 95% this time last year, with dry weather a concern in some areas. ProAgro estimates Ukraine’s 2020 wheat crop at 26.59 million tons, up a little more than a half million from their prior projection, but dry weather in central and southern areas could limit winter wheat planting. A private Canadian crop firm is projection record wheat production for that nation, thanks to good weather.