Market News

Soybeans, corn continue lower trend

Soybeans were lower on fund and technical selling, starting the 2021/22 marketing year in the red. There was another round of pressure from recent rainfall, with more in the forecast for some areas later this week. That’s boosting production prospects at a critical time for domestic and global demand. The next set of USDA production numbers will be based on objective yield data, not farmer surveys. The trade is also concerned about interior movement in the Midwest and shipping delays out of the Gulf following Ida, which could be significant. The USDA says July’s soybean crush was 166 million bushels, larger than expected and up 4 million on the month, but down 19 million on the year. Soybean meal and oil were lower, following beans, with oil picking up additional pressure from the recent decline in global vegetable oil prices. Argentina’s Ministry of Agriculture says 28.5 million tons of that nation’s 2020/21 soybean crop have been sold, compared to 30.3 million this time last year for 2019/20. 2020/21 soybean production in Argentina was 43.5 million tons, compared to 49 million in 2019/20. Beans are also watching conditions ahead of widespread planting in Brazil. ANEC estimates Brazil’s August exports at 5.785 million tons, a little bit lower than the previous projection. There’s been talk, but no new confirmation, of China buying U.S. beans this week.

Corn was lower on fund and technical selling. Corn is also watching late development conditions and the likely slowdown of Gulf exports. Corn, like beans, will need a trend line yield or better to meet demand expectations, and the interior movement and export delays could be significant. New USDA supply, demand, and production numbers are out on the 10^th. This round of numbers will include updated planted and harvested area for several crops, including corn and beans, a month earlier than normal. Argentina’s Ministry of Agriculture says 2020/21 corn sales are 38.7 million tons, roughly 3 million more than at this stage in 2019/20. Corn is also watching the tail end of old crop second crop corn harvest activity in Brazil and conditions just ahead of new crop first crop planting. ANEC sees Brazil’s August corn exports at 4.344 million tons, slightly under the prior guess. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 905,000 barrels a day, down 28,000 on the week and 17,000 on the year, the lowest weekly average since February and the ninth week in a row with a decline. Stocks of 21.11 million barrels were 113,000 lower than the previous week, but 228,000 higher than a year ago. The USDA says July corn for ethanol use was 449.121 million bushels, with DDGS production at 1,970,139 tons, both up 2% from June and 6% from July 2020.

The wheat complex was lower on fund and technical selling. The trade is watching spring wheat harvest activity especially in the U.S., Canada, and Russia, but also in Ukraine and Europe. That recent rain in the U.S. Plains and Midwest has partially recharged soil moisture ahead of winter wheat planting, but more is needed in some areas. The world supply is getting tighter due to crop issues in the U.S. and other key exporters, which leaves the fundamental outlook for wheat neutral to a little friendly, even if U.S. export demand has been slow during the first quarter of the 2021/22 marketing year. The USDA’s weekly export sales numbers are out Thursday at 8:30 AM Eastern/7:30 Central. DTN says Algeria bought 390,000 to 400,000 tons of milling wheat from an unspecified origin. Argentina’s Ag Ministry says 5.7 million tons of the 2021/22 wheat crop have been sold, with harvest starting in November.