Soybeans, corn, wheat end session lower
October 27, 2020 By John Perkins Filed Under: Closing Futures / Livestock Briefs, Crops Markets, Market News
Soybeans were modestly lower on profit taking and technical selling, with contracts overbought after the recent gains. The trade is watching the planting pace in South America and harvest activity in the U.S. Brazil is now about 25% planted and the U.S. harvest is running ahead of average but is expected to see some delays this week. Demand is solid and farmers in Argentina continue to hold onto beans to fight inflation, limiting losses. No new export sales were announced Tuesday, but the overall pace of both sales and physical shipments is well ahead of last marketing year, largely due to demand from China. China continues to get at least some of their near-term beans from Brazil with expectations the bulk of the U.S. purchases will be delivered this winter. Soybean meal and oil followed beans lower.Corn was modestly lower on profit taking and technical selling, still remaining close to the recent highs. Contracts did make another round of more than one-year highs early in the session on solid export and domestic demand but were unable to follow through. Corn is also waiting to see whether or not China will increase its tariff rate quota on corn imports, as rumored. The U.S. harvest has slowed in some areas because of weather, but could pick up steam broadly later this week, while South American planting is moving forward. The critical crop in South America will be Brazil’s second crop, the source of most of their exports, which is planted after the soybean harvest, which was pushed back a couple of weeks. Brazil’s first crop is about 75% planted. DTN says South Korean feed mills bought more than 250,000 tons of optional origin corn and a feed mill in Taiwan purchased 65,000 tons of U.S. corn. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The European Union crop agency MARS lowered its corn production outlook, citing inclement weather.The wheat complex was modestly lower on profit taking and technical selling, despite weakness in the dollar. 41% of U.S. winter wheat is in good to excellent shape, lower than expected heading into the weekly numbers and well below a year ago. Most forecasts do have improved precipitation in dry parts of the U.S. Plains, which should boost the rating for hard red winter. Soft red winter is in comparatively good shape, but there are areas of concern. Winter wheat planting conditions have improved somewhat in Ukraine and Russia thanks to recent rainfall. Ukraine’s Economic Ministry says it does not plan to review its wheat export quota for the 2020/21 marketing year, leaving the cap at 17.5 million tons. More rain is reportedly headed for dry parts of Russia, but coverage and totals are uncertain.
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