Market News

New multi-year high for November soybeans

Soybeans were higher on commercial and technical buying, with the highest close for a November contract in four years and strong weekly gains across the pit. The USDA made bigger than expected cuts to U.S. production and ending stocks, with harvest activity expected to make a decent advance in most areas over the next few days. The South American production and export numbers were unchanged, but that could change because of weather, while the import estimate for China was raised 1 million tons to 100 million. No new export sales were announced Friday morning, but general expectations are for more solid demand now that the Mid-Autumn Festival has ended. That demand could last for longer than normal because of the dry weather planting delays in Argentina and Brazil. Soybean meal and oil were supported by the tone in beans. New crop U.S. soybean meal ending stocks were steady, while bean oil was lower on biodiesel demand expectations. Additionally, Malaysian palm oil futures had a strong week on demand expectations, coronavirus restrictions, and heavy rainfall in some key growing areas. The 2020/21 marketing year for soybean products started October 1^st.

Corn was higher on commercial and technical buying, posting good week to week gains. The USDA also lowered the outlooks for U.S. production and ending stocks as harvest is ongoing while leaving South America estimates unchanged. South American corn planting is mostly contingent on their soybean harvest, which could be pushed back by slow planting. Corn imports by China were steady with September at 7 million tons, also the current expectation by Beijing. Just over a month into the 2020/21 marketing year, corn import purchases by China have passed that mark, but most of it still needs to be shipped. There is talk that China will be in the market for even more U.S. corn soon. The trade is also waiting to see what happens after Hurricane Delta makes landfall. Ethanol futures were higher.

The wheat complex was mostly higher, with Chicago mostly weak and Kansas City and Minneapolis up modestly, but with solid weekly gains at all three exchanges. World production and ending stocks were up on the month, but those are expected to change because of weather issues. Large parts of the Black Sea region and U.S. Plains continue to see drier than normal conditions during winter wheat planting. The USDA did raise the wheat production estimate for Russia’s last crop, but new crop planting could fall by 10% to 15%, according to SovEcon. There are also concerns for Argentina’s crop development and about mixed weather conditions in the European Union. U.S. wheat ending stocks were down from September on lower beginning stocks, production, and imports. DTN says Japan bought 118,428 tons of food wheat from the U.S., Australia, and Canada, while Pakistan is tendering for 300,000 tons of wheat and Jordan is in the market for 120,000 tons of milling wheat.