Market News

Soybeans, corn up, watching weather

Soybeans were higher on short covering and technical buying, with the most active months posting big week to week gains. The trade is watching the weather, expecting hot, dry conditions in many areas, while waiting to see what’s next with China. China’s General Administration of Customs says soybean imports for June were 6.5 million tons, down sharply on both the month and the year, with January through June purchases at 38.27 million tons, a drop of 14.7% from the same period in 2018. African Swine Fever continues to have an impact on feed demand and both U.S. and Chinese tariffs remain in place. There’s more talk of Chinese demand for U.S. ag goods, but nothing’s surfaced yet. The USDA didn’t make any changes to its 2018/19 or 2019/20 soybean demand estimates. The new USDA production number was down on the month, but not a factor because of acreage questions. Soybean meal and oil were higher, following beans.

Corn was higher on short covering and technical buying, with September and December corn each gaining more than $.15 on the week. Corn is also watching the weather, with the potential for heat stress in parts of the Midwest and Plains. Most forecasts have the hotter, drier period lasting for a couple of weeks, but if it persists longer, it’d sap the residual soil moisture leftover from the wet spring. Some areas are already showing a net drying effect. The USDA’s next set of crop progress and condition numbers is out Monday afternoon. The USDA’s new production number was disregarded quickly. Results of the USDA’s acreage resurvey are out August 12^th, with prevent plant totals also scheduled for August. The USDA says Panama bought 104,100 tons of 2019/20 U.S. corn. Ethanol futures were higher.

The wheat complex was modestly higher on short covering and technical buying. The USDA made bigger than expected cuts to U.S. and world supplies, but the fundamental outlook remains bearish because the USDA’s global ending stocks projection is still larger than last year. Wheat is also watching world weather issues, including possible crop loss for some key export competitors, including Australia, Canada, Europe, and the Black Sea region. At this point, U.S. wheat isn’t all that competitive because of the recent increase in price. September Kansas City was up more than $.20 on the week, with September Chicago and Minneapolis gaining less than a dime. The trade’s watching winter wheat harvest weather and spring wheat development conditions. DTN says Japan bought a total of 98,705 tons of food wheat from the U.S., Australia, and Canada.