Market News

Soybeans find some new buying interest

Soybeans were higher on commercial and technical buying. Contracts were oversold and due for a bounce, with help from a higher move in soybean meal. Soybean meal was up on solid demand and the concerns about domestic cotton production and demand expectations due to a projected drop in cottonseed meal availability. Soybean oil was down despite gains in palm and crude oils, in addition to the bullish incentives for biofuels tied to the Inflation Reduction Act. The domestic soybean cash basis is trending lower, but crush margins remain in positive territory. The trade continues to keep an eye on a potential slowdown in demand from China due to economic weakness. That said – it seems like nearly every time the trade is convinced China has turned away from U.S. for something other than seasonal or price reasons, Beijing shows some interest again. Recent rainfall in some of the drier U.S. growing areas is expected to help yields prospects.

Corn was mixed, adjusting spreads. Corn consolidated, keeping an eye on the weather, and while the recent rain is too late to boost yields in parts of the region, it should help stabilize things. The USDA’s first field-based production and yield estimates of the season are out September 12^th. Early harvest activity is underway in some southern growing areas. The USDA did trim the yield estimate earlier this month, with the potential for another reduction next month, which will factor in the weather during the first half of August. Tighter ethanol profit margins were reflected in this week’s U.S. Energy Information Administration update. Production averaged 983,000 barrels a day, the lowest since April and down 39,000 on the week, but still up 10,000 on the year, with a domestic supply 23.446 million barrels, an increase of 190,000 from the previous week and 1.888 million from a year ago. Recent rainfall in dry parts of the European Union might be too little, too late.

The wheat complex was lower on fund and technical selling, along with higher trade in the U.S. dollar for most of the session. Domestic weather remains mixed, with drier conditions in some spring wheat growing areas potentially lowering yield. Rain in the southern and southwestern Plains is recharging soil moisture ahead of winter wheat planting. Globally, demand for U.S. wheat continues to be slow, due in part to the relative strength in the dollar, which makes U.S. goods more expensive on the export market. The USDA’s weekly sales numbers are out Thursday morning. Export shipments continue to trickle out of Ukraine’s Black Sea ports, with no interference from Russia. Ukraine, Russia, Turkey, and the U.N. are scheduled to meet Thursday.