Market News

Soybeans, corn down on harvest, potential rail strike

Soybeans were lower on fund and technical selling. Soybeans are watching late U.S. development weather and a potential railroad strike that would greatly disrupt movement. Domestic demand is solid and the USDA’s export sales reports resume Thursday after an extended delay caused by database issues. The department is set to release four weeks’ worth of data. Soybean meal was mixed, mostly lower, adjusting spreads, while bean oil was down sharply on profit taking and concerns about vegetable oil demand from China. The NOPA’s member soybean crush numbers for August are also out Thursday. The average estimate is 166.110 million bushels, with oil stocks expected to be down on the month. New crop planting is nearly underway in Brazil, with many analysts expecting a record crop. Sources in Argentina report farmer selling continues to surge following Buenos Aires’ move to raise the exchange rate for soybeans. Statistics Canada estimates new crop canola production at 19.099 million tons, up 38.8% on the year thanks to better yields. Canada’s soybean crop is seen at 6.505 million tons, 3.7% more than in 2021.

Corn was lower on fund and technical selling. The trade is focusing on harvest activity and the potential railroad strike, while export demand is slow due to competition from Brazil and Ukraine. The agreement allowing grain movement through Ukraine’s Black Sea ports expires in late November, with Russia unlikely to endorse an extension. Russia and Turkey are scheduled to meet with several other nations Friday to discuss the situation. Ukraine’s Ministry of Agrarian Policy says that from the start of the marketing year July 1^st to September 14^th, corn exports were 3.42 million tons, 60% ahead of the year ago pace. Statistics Canada projects this year’s corn crop at 14.861 million tons, 6.3% higher than a year ago, with yields up in key growing areas. Stateside, some railroad companies are suspending grain movement ahead of a possible strike. The U.S. Energy Information Administration says ethanol production last week fell to a 20-week low at 963,000 barrels a day, a decrease of 26,000 from the prior week, but an increase of 26,000 from a year ago. The domestic supply hit a nearly three month low at 22.843 million barrels, 295,000 lower than the week before, but 2.833 million higher than last year.

The wheat complex was higher on fund and technical buying, along with a lower move in the dollar index. Large parts of the U.S. hard red winter growing region remain locked in drought or near drought conditions, which could limit planted area. The trade is also monitoring the end of the spring wheat harvest, with the USDA’s small grains production summary out on the 30^th. Dry weather and recent frost/freeze events are big issues in Argentina and the emerging La Nina pattern could damage wheat in parts of Australia. Ukraine remains a very fluid situation, with troops retaking some of the territory that had been held by Russia, but with that ongoing unprovoked invasion continuing to impact nearly every aspect of Ukrainian life. Ukraine’s Ministry of Agrarian Policy says that since the beginning of the marketing year July 1^st, wheat exports are 1.83 million tons, behind the year ago pace with the focus largely on corn. The Russian Grain Union says that nation’s wheat exports are behind the year ago pace. Statistics Canada expects all wheat production to be 34.703 million tons this year, a jump of 55.6% from last year, including 26.053 million tons of spring wheat, an increase of 60.3%. France’s AgriMer estimates 2022/23 non-European Union wheat exports at 10 million tons, 300,000 less than the July guess.