Market News

Soybeans down, corn mostly weak ahead of USDA numbers

Soybeans were modestly lower on fund and technical selling. China bought 131,000 tons of 2017/18 U.S. beans and near term forecasts have more harvest delaying rain. The USDA reports 36% of soybeans are harvested, compared to 22% last week, 41% last year, and the five year average of 43%, while 89% are dropping leaves, compared to 90% a year ago and 87% on average. 61% of U.S. beans are rated good to excellent, up 1% on the week. Thursday’s USDA numbers should show a large, if not record, crop. Those reports are out on the 12th at Noon Eastern/11 Central. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. It’s probably too early in the season for any official adjustments, but a continued dry pattern in parts of Brazil will delay soybean planting, and possibly lower acreage, while also delaying planting of Brazil’s second corn crop. CONAB says even if acreage is up on the year as planned, production will likely be lower than last year, because of weather. Safras e Mercado reports 14% of 2017/18 soybean production has been sold, compared to 22% at this point in 2016/17 and the five year average of 26%, adding 20 million tons of 2016/17 Brazilian beans have yet to be sold.

Corn was steady to fractionally lower on fund and technical selling. Corn is also watching harvest delays in the Midwest and Plains, along with any potential freeze damage in the northern Plains. As of Sunday, 22% of corn is harvested, compared to 17% the previous week, 33% this time last year, and the typical pace of 37%, while 82% has reached maturity, compared to 92% a year ago and 87% on average. 64% of U.S. corn is in good to excellent shape, up 1% from a week ago. The upcoming USDA numbers are expected to show a large crop and big supplies. In Brazil, CONAB sees a lower yield for that nation’s first corn crop, with production now seen at 25.02 million to 26.43 million tons. Brazil’s second crop will depend on the timely planting of soybeans. Ethanol future were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are pushed back to Thursday and the USDA’s weekly export sales report will be out Friday morning. Australia’s Bureau of Meteorology says most El Nino/La Nina signals remain neutral, but there is the possibility of a weak La Nina pattern emerging later this year.

The wheat complex was mixed, with Kansas City firm and Chicago and Minneapolis modestly lower. Recent rainfall has probably caused at least some delay in winter wheat planting, but is also expected to be beneficial for the crop. According to the USDA, 48% of U.S. winter wheat is planted, compared to 57% last year and 58% normally, while 25% has emerged, compared to 32% a year ago and 30% on average. Thursday’s USDA numbers are expected to show ample U.S. and world ending stocks. CONAB expects Brazil’s wheat crop to be down on the year because of lower yields and smaller planted area. A number of new wheat tenders are out this week, including Japan, in the market for 106,045 tons from the U.S., Australia, and Canada, Egypt, tendering for an unknown amount of milling wheat from Russia, and Ethiopia, which is looking for 400,000 tons of milling wheat. Argentina’s Ag Ministry announced the sale of 30,000 tons of wheat to Mexico, the first sale of that type on record. The USDA’s attaché in India, 2017/18 domestic wheat production is expected to be 98.4 million tons, with lower imports because of weak local prices.