Market News

Soybeans, corn find new buying interest

Soybeans were higher on commercial and technical buying. Traders are watching the weather with high heat stressing the crop in most of the Midwest. Temperatures are expected to moderate in some areas this weekend, but conditions could stay mostly dry into early September. Given how tight new crop U.S. ending stocks projections already are, there’s not a lot of room in the balance sheet for further declines in yield. The USDA’s next round of yield projections is out September 12^th. The trade is also monitoring conditions in South America ahead of new crop planting. Soybean meal and oil were higher, uncovering new buying interest with the help of beans. Unknown destinations bought 100,000 tons of 2023/24 U.S. soybean meal Wednesday morning. The USDA’s weekly sales numbers are out Thursday morning. Sustained demand by China is a question mark because of economic questions and shifts in diet.

Corn was higher on short covering and technical buying. Corn bounced off the recent lows, helped out by the weather and U.S. corn becoming competitive for exports. Even if export demand is slow due to competition from Brazil and Ukraine, ethanol margins are solidly in positive territory, canceling out some of that bearishness. The U.S. Energy Information Administration says ethanol production last week averaged 1.048 million barrels a day, a decrease of 21,000 on the week, but an increase of 61,000 on the year, while stocks were reported at 22.79 million barrels, a drop of 645,000 from a week ago and 1.017 million below a year ago. A major crop tour this week is showing mixed yields in the Corn Belt. Corn is also keeping an eye on second crop harvest activity and yield totals in Brazil.

The wheat complex was higher on short covering and technical buying. The complex is oversold, the domestic supply is very tight, and U.S. soft red winter is a contender for improved export demand. There have been reports of another round of strikes by Russia on Ukraine’s export infrastructure, damaging terminals and destroying some grain. Russia’s hold on the export market is slipping as other origins decline in price, while Ukraine has been exploring alternative shipping routes. Some insurers are raising rates for vessels in the Black Sea region due to the extreme risk, which could also slow down shipments. Dry weather is a concern in Argentina and Australia, while wet conditions are an issue in Germany. Statistics Canada is set to release updated production numbers Thursday. The trade is monitoring U.S. spring and winter wheat harvest activity.