Market News

Soybeans, corn have differing reactions to weekend rain

Soybeans were sharply lower on speculative and technical selling. There was good rainfall over the weekend in some key growing areas, potentially helping yields. The USDA says 57% of U.S. soybeans are in good to excellent condition, unchanged, with 91% of the crop at the pod setting stage, compared to the five-year average of 92%, and 4% dropping leaves, compared to 7% on average. Even with the recent record production and yield estimates from the USDA, the new crop ending stocks projections are expected to remain tight. There are concerns about sustained demand from China because of economic issues. Export inspections were mixed, down on the week, up on the year, mainly to Mexico and Indonesia. Soybean meal and oil were mixed, mostly lower, on bull spreading, getting ready for Wednesday’s first notice day for September contracts. Deliveries against those contracts are expected to be light. Statistics Canada says producers are expected to harvest 19.499 million tons of canola in 2022, slightly fewer than expected, but up 41.7% from 2021. Soybean production is seen at 6.382 million tons, 1.8% more than a year ago.

Corn was higher on short covering and technical buying. That weekend rainfall might have helped stabilize yields but could be too late in some areas to boost projections. As of Sunday, 54% of U.S. corn is called good to excellent, down 1%, with 86% at the dough making stage, 46% dented, and 8% mature, all slower than normal. The USDA’s first field-based yield estimate of the season is out September 12^th in the monthly supply and demand update. The big questions are how much of a difference has the August rainfall made and how big of an adjustment will the USDA make? Export inspections were below a week ago, but above a year ago, primarily to China and Mexico. U.S. corn is facing some headwinds right now from the relative strength in the dollar and the increased pace of sales out of Ukraine, with corn from that origin at a discount to U.S. supplies. Statistics Canada estimates this year’s corn crop at 14.825 million tons this year, more than anticipated and 6% above the 2021 total.

The wheat complex was higher on short covering and technical buying. The dollar was mostly lower during the session, but remains near the high for the year, limiting U.S. export competitiveness. Export inspections were less than last week, but more than last year, mainly to Mexico and China. Ukraine’s wheat exports are slow, but overall, shipments are leaving the Black Sea ports unimpeded with other commodities. Ukraine’s State Customs Service says that exports for the month to date are nearly 2 million tons, most of that corn. Meanwhile, it looks like business might be picking up for Russia, with their prices at a discount to competing exporters like the European Union and U.S. For U.S. winter wheat, the harvest is officially over. For U.S. spring wheat, 68% of the crop is called good to excellent, 4% higher, with 50% harvested, compared to 71% on average. Statistics Canada projects 2022 wheat production at a total of 34.572 million tons, above pre-report expectations and a year-to-year jump of 55.1%, including 25.565 million tons of spring wheat, a surge of 57.3%. StatsCan pegs Canada’s winter wheat crop at 2.534 million tons, a drop of 15.7%.