Market News

Soybeans, corn gain after USDA reports

Soybeans were higher on commercial and technical buying, seeing an oversold bounce, despite a bearish set of USDA numbers. The USDA raised yield, production, acreage, and ending stocks estimates, generally close to pre-report expectations. Still, harvest is only getting started in southern growing areas and beans will need a trend line yield or better to meet demand expectations. The USDA did raise beginning stocks while lowering imports and crush use, while boosting the export demand guess. Globally, production and export outlooks were unchanged for Argentina and Brazil, while China’s import guess held steady. China bought 132,000 tons of U.S. beans Friday morning, pushing the announced total for the month to 626,000 tons. Weekly new crop sales were nearly 1.5 million tons, mainly to China and unknown destinations. 2020/21 soybean exports were up 35% from 2019/20 but fell just short of USDA estimates. Soybean meal was higher and bean oil was lower, adjusting product spreads.

Corn was modestly higher on commercial and technical buying, shrugging off a dive after the bearish USDA numbers in favor of oversold signals. The USDA also raised corn yield, production, acreage, and ending stocks estimates. Exports and feed demand were up on the month, but below the old crop totals. The new marketing year started September 1^st. Globally, production was up in Argentina and China, steady in Brazil and Ukraine, and down for Russia. China’s import guess was unchanged from August. New crop export sales were more than 900,000 tons, with Mexico and unknown destinations combining for more than half of the total. The 2020/21 total was up 55% from 2019/20, but slightly below the USDA’s most recent projection. The USDA’s first corn harvest estimate of the season is expected to be out Monday in the weekly crop progress and condition report. Ethanol futures were unchanged. First crop corn planting is underway in Brazil, with the trade waiting to see the impact of the expected La Nina pattern.

The wheat complex was mixed. U.S. wheat ending stocks were a little bit below expectations at 615 million bushels, while global stocks moved higher. On the U.S. side of the ledger, imports were down, while food use was up slightly and exports were unchanged. The USDA left Russian production unchanged, while lowering outlooks for Argentina and Canada. The USDA raised production expectations Australia, China, India, and the European Union. The U.S. guess was unchanged on the month, with spring wheat harvest about to wrap up and the USDA’s small grains summary out at the end of the month. Export sales were up on the week, Mexico and the Philippines led the way, but a quarter in to 2021/22, the pace continues to trail 2020/21. Some business is resuming on the Louisiana Gulf Coast, but damage from Hurricane Ida is expected to impact shipping for weeks. DTN says the Philippines bought 56,000 tons of feed wheat from both Australia and India, while Morocco is tendering for 363,000 tons of U.S. soft wheat, Saudi Arabia is in the market for 360,000 tons of wheat, Jordan is looking for 120,000 tons of milling wheat, and Tunisia is tendering for 100,000 tons of milling wheat.