Market News

Soybeans, corn, wheat down ahead of USDA reports

Soybeans were lower on fund and technical selling. The trade was getting ready for Friday’s USDA numbers, expecting higher production, yield, and acreage estimates. Still, that yield number will be watched closely and the supply projections will likely remain historically tight. On average, according to DTN, U.S. production is seen at 4.363 billion bushels, with an average yield of 50.3 bushels per acre, compared to 4.339 billion and 50 bushels an acre in August. Old and new crop U.S. ending stocks are expected to be up on the month, while analysts expect a slight contraction for old crop world stocks against a modest increase for new crop. Those numbers are out at Noon Eastern/11 Central, preceded by the USDA’s weekly export sales numbers, scheduled for 8:30 Eastern/7:30 Central. China bought 132,000 tons of 2021/22 U.S. soybeans Thursday, bringing their announced total for the month to 494,000 tons. CONAB pegs 2020/21 Brazilian soybean production at a record large 135.912 million tons, slightly less than last month, but up 8.9% from 2019/20. Early 2021/22 planting is underway in parts of Brazil, with widespread activity expected next week. The trade is also watching conditions ahead of planting in Argentina. Soybean meal was mostly firm, adjusting spreads, and bean oil dropped, following the lead of canola and palm oil.

Corn was modestly lower on fund and technical selling. Corn was getting ready for Friday’s USDA reports, expecting higher production, yield, and acreage numbers. Corn will need a trend line yield or better to meet demand projections and limit further price inflation for end users. This round of reports will include updated acreage numbers, with production and yield based on objective field data. Ahead of the report, the average guesses for corn are a crop of 14.897 billion bushels with an average yield of 175.5 bushels per acre, compared to 14.75 billion bushels and 174.6 bushels per acre a month ago. Old and new crop U.S. and world ending stocks are expected to be higher. Corn is also monitoring conditions in Brazil during first crop corn planting, with CONAB’s first outlook of the season due later this month. CONAB now has Brazil’s second 2020/21 crop at 59.472 million tons, down 1.4% on the month and 20.8% on the year, pulling total production to 85.749 million tons, a decline of 1% from August and 16.4% from 2019/20. 2020/21 exports are pegged at 22 million tons, considerably smaller than the previous marketing year due to that drop in second crop production. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week rose for the first time since early July, gaining 18,000 barrels on the week to an average of 923,000 barrels a day, but that was down 18,000 on the year. The U.S. supply contracted 720,000 barrels to 20.39 million barrels, a 13-week low, which was 397,000 above a year ago.

The wheat complex was lower on fund and technical selling. U.S. and world wheat ending stocks are expected to be down slightly on the month, while U.S. acreage could be higher following an early release of some FSA data earlier this week. Analysts seen 2021/22 U.S. wheat ending stocks at 619 million bushels, compared to 627 million in August, with old crop global supplies at 288.6 million tons, compared to 288.8 million a month ago, and new crop stocks at 278.9 million tons, compared to 279.1 million last month. Some U.S. production changes are possible, but that might wait until the small grain production summary at the end of the month. Global production estimate adjustments are likely for several key global growers. That includes Canada, Russia, Ukraine, Australia, and Argentina. The U.S. spring wheat harvest is nearly over, with winter planting underway. CONAB has Brazil’s 2020/21 wheat crop at 8.156 million tons, 5.1% less than the August update, but 30.8% more than 2019/20. Commodities continue to monitor shipping delays out of the Gulf following Hurricane Ida.