Market News

Soybeans fall on recent rain, but bounce off lows

Soybeans were lower on speculative and technical selling but managed to finish above the session lows. The recent rain in the Midwest and Plains might have missed some areas but could stabilize or even boost yields in parts of the region. The USDA’s August report had record large production and an all-time high for average yield, with the next estimate out September 12^th. The USDA’s good to excellent rating was unchanged on the week, with development slightly behind the five-year average. Unknown destinations bought 264,000 tons of new crop U.S. soybeans. That could turn out to be China when it’s time for delivery. The weekly sales numbers, normally out Thursday, have been delayed indefinitely after the switch to a new system. Soybean meal was down and soybean oil was mostly lower, with both influenced by the fundamental implications of a record or near-record large U.S. crop. The first notice day for September grain and oilseed contracts is Wednesday, with deliveries against beans and products expected to be light. The new marketing year for soybeans, and corn, gets underway Thursday. A survey from Farm Futures magazine is projecting 2023 U.S. soybean acreage at 87.331 million acres, which would be fractionally lower than this year. ABIOVE sees Brazil’s 2023 crop at a record 151 million tons, primarily citing an increase in acreage, with planting getting underway next month.

Corn was lower on fund and technical selling. Corn saw some spillover from the lower moves in soybeans, soybean meal, and crude oil. The USDA’s good to excellent rating was down 1% and development is slower than normal. The recent rainfall in parts of the Midwest and Plains likely hasn’t pushed corn yields higher but might limit any further declines. In any event, it’s been a widely varied year for the U.S. corn crop. The Farm Futures Magazine 2023 U.S. planted area survey has corn at 94.282 million acres, which would be the largest U.S. total since 2013. Consulting firm Agritel pegs France’s corn crop at 10.8 million tons, the smallest this century due to drought, with European Union production seen at 53.8 million tons, the lowest since 2007. Export demand for U.S. corn has been slow, but that could improve due to a price advantage over some key competitors. The U.S. Energy Information Administration’s weekly ethanol numbers are out Wednesday.

The wheat complex was lower on fund and technical selling. The fundamental outlook for U.S. wheat remains neutral to bearish due to slow export demand, even with tighter global supplies. Part of that slow export demand is due to the relative strength of the U.S. dollar, which makes U.S. goods more expensive on the export market. Ukraine’s Minister of Infrastructure projects August grain exports at 3 million tons. There’s been no reported interference in Ukraine’s Black Sea exports by Russia, but ongoing attacks continue to disrupt winter grain harvest activity. The U.S. spring wheat condition rating improved, but harvest is behind average. The USDA’s small grains production report is out in about a month. The Farm Futures Magazine acreage survey puts 2023 wheat planted area at 48.842 million acres, nearly 4% higher than this year, including 36.553 million acres of winter wheat, up 7.5%, and 12.289 million acres of spring wheat, down 5.4%. According to reports from Argentina, as much as 10% of that nation’s 2022/23 wheat crop could be lost to ongoing drought. Consulting firm Agritel expects France’s 2022 soft wheat crop to be 33.63 million tons, slightly more than last year, but below the five-year average, with exports running ahead of a year ago due to the issues in the Black Sea region.