Market News

Soybeans, corn recover some recent losses

Soybeans were higher on short covering and technical buying. The USDA’s national condition rating improved thanks to the recent change in weather in much of the Midwest. Still, parts of the region have a long way to go to fully recover and some areas remain drier than normal. Southern growing areas could see some damage from another round of high temperatures. Soybean meal was mixed on bear spreading and soybean oil was steady to lower on spread trade and follow through selling. U.S. crush margins remain bullish. Brazil’s foreign trade ministry says January to July soybean shipments to China were record large at 50.4 million tons, with total sales for the first half of the year at 72.47 million tons. U.S. beans have recently become more competitive on the export market, which is expected to aid U.S. new crop sales. The new marketing year for soybeans, and corn, starts September 1^st. China’s General Administration of Customs says July imports were 9.731 million tons, pulling total imports for the year to date to 62.303 million tons. The Rosario Grain Exchange says Brazil’s soybean meal exports passed Argentina’s soybean meal exports during July, the first time that’s happened in more than a quarter century.

Corn was higher on short covering and technical buying. The national corn rating was up on the week thanks to better weather and development is close to normal. Some damage has been done by widespread drought earlier in the growing season, but the trade isn’t expecting a drastic cut in the next round of USDA projections. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The Renewable Fuels Association says June ethanol exports were 112.9 million gallons, down 1% from May, with Canada claiming the top slot for the 27^th month in a row, followed by the European Union, the United Kingdom, South Korea, and Peru, with no reported sales to Brazil or India. DDGS exports for June were 949,904 tons, 1% lower, primarily to Mexico, Vietnam, and Indonesia. For the first half of 2023, ethanol exports are 11% behind the 2022 pace with DDGS exports 10% slower. The trade is also watching Brazil’s second crop harvest ahead of Thursday’s CONAB update.

The wheat complex was mixed. The winter and spring wheat harvests are slower than average but moving forward, with mixed anecdotal yields. The USDA’s updated yield and production estimates are out this Friday at Noon Eastern/11 Central. Dry weather is a concern in parts of the northern U.S. Plains, Canada, Argentina, and Australia. One of the bigger question marks for the complex continues to be the volatile situation in the Black Sea region due to Russia’s ongoing war with Ukraine. Even if there is an extended cessation of shipments from the region, either from infrastructure damage or an expansion in the conflict, it’s uncertain just how much business the U.S. would pick up. The biggest impact would be on the humanitarian level. For now, Russia continues to control the market due to a significant price advantage. SovEcon projects Russian 2023/24 wheat exports at a record 48.1 million tons, 900,000 above the prior guess. IKAR pegs the crop at 88 million tons.