Market News

Soybeans, corn end session mostly modestly lower

Soybeans were mostly lower on spread trade and profit taking. It was an up and down day after the post-USDA report jump, with a bigger than expected cut to the yield and acreage numbers, which pulled the new crop ending stocks projection to 200 million bushels with just over 11 months remaining in 2022/23. The USDA’s national good to excellent rating dipped 1%, with another mixed week of weather in the Midwest and Plains. The trade is also waiting to see what the USDA reports Thursday when it issues four weeks of delayed export sales numbers. China’s domestic prices were up sharply Tuesday, which could lead to more imports, but there are uncertainties about demand because of COVID lockdowns. Soybean meal was lower on profit taking and product spread adjustments. That spread trade supported bean oil, which, along with higher palm oil, allowed it to shrug off the losses in crude oil. Those gains in palm oil were tied to strong demand from India.

Corn was mostly lower on spread trade and profit taking. There was spillover pressure from the broader market and export demand is slow with competition from Brazil and Ukraine. For Brazil, grain export group ANEC now estimates September corn exports at 7.88 million tons, compared to 6.31 million last week. As for Ukraine, exports continue to move out of the Black Sea and Ukraine has taken back big chunks of territory from Russia. Monday’s drop in the USDA production estimate could lead to the tightest domestic ending stocks in a decade. 53% of the crop is rated good to excellent, down 1% on the week, with national development slower than average and 5% of the crop harvested. France’s Ag Ministry lowered its corn production estimate to 11.33 million tons, down 8% on the month due to drought and, if realized, the smallest crop in more than 30 years. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was modestly higher on short covering and technical buying. Drought continues to be the big issue in large swaths of the southern U.S. Plains and could impact winter planted area. The spring wheat harvest is close to being over for the season. The USDA’s next spring wheat production update is in the 2022 Small Grains Summary, out Friday, September 30^th. The trade is also waiting to see what happens in Friday’s meeting between Russia and Turkey regarding Ukraine’s exports. Russia’s invasion of Ukraine has impacted harvest and exports and will likely lead to a big drop in planted area. France’s Ag Ministry projects 2022 soft wheat production at 34.12 million tons, compared to 33.87 million a month ago. Heavier than normal rain associated with a La Nina pattern is expected to impact wheat in Australia. Global production is critical because if China is removed from the equation, ending stocks this marketing year will be a more than 10-year low.