Market News

Soybeans, corn up, watching outside markets and harvest

Soybeans were higher on short covering and technical buying. Soybeans were up with gains in soybean oil and mostly bullish activity in the broader market during the futures session, including lower trade in the dollar and a solidly higher move in crude oil. Late U.S. development and harvest are a little slower than normal, but near-term conditions generally look good ahead of a shift to colder conditions in some area ahead of the weekend. Soybean meal was mixed on bear spreading, while soybean oil was up on that higher move in crude oil and global vegetable oil demand expectations. The Buenos Aires Grain Exchange says Argentine farmers moved a total of 16.1 million tons of soybeans during the “soy dollar” program, designed to spark increased trade, which ended September 30^th. Some key growing areas of Argentina remain exceptionally dry ahead of widespread planting, while rain is delaying activity in portions of Brazil. China’s Golden Week holiday is ongoing, which will likely impact export demand.

Corn was modestly higher on short covering and technical buying, in addition to the activity in the broader market. Late corn development and harvest are both behind average, with a possible frost/freeze event in northern parts of the region later this week. That could impact yield to some extent with anecdotal yield numbers already varying widely around the region. Still, rainfall in most of the Midwest and Plains should be minimal over the next couple of weeks. The USDA’s updated supply, demand, and production numbers are out October 12^th. The trade is also watching conditions in South America as planting gets underway. CONAB’s first official outlook for new crop production in Brazil is scheduled for this Thursday. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was mixed. Drought conditions are spreading in parts of the southern and southwestern U.S. Plains, potentially impacting hard red winter wheat, but that’ll be a bigger deal when the crop emerges from dormancy next spring. The trade is watching for new developments in Russia’s occupation of Ukraine. Russia is moving troops around, preparing to officially take command of four Ukrainian provinces following what many outside of Moscow have regarded as a very questionable vote. Russia’s Ag Minister believes those provinces could produce an additional 5 million tons of grain a year. It’s hard to overstate just how much of an impact Russia’s February invasion of Ukraine has had on everyday life, including agriculture. Ukraine’s Ag Ministry says winter wheat planting is only 27% complete, a third of what it was a year ago, and while Ukraine’s Black Sea exports are picking up steam, it’s unlikely the corridor will be extended past November 22^nd.