Market News

Soybeans give back some gains as corn closes mixed

Soybeans were lower on profit taking and technical selling. Contracts are overbought as traders continue to focus on lower yield projections, with the potential for reductions by the USDA due to weather. Most forecasts have a generally dry end to August in much of the region, against heavy rainfall in some southern and southeastern areas. Earlier this month, the USDA was projecting a record yield, but that will likely change following the recent crop tours and acreage adjustments. China bought 517,000 tons of new crop U.S. beans for a two-day total of 627,000 tons. That’s a signal that Beijing is starting to shift from tighter South American supplies to U.S. beans. The USDA’s weekly export sales numbers are out Thursday morning. The trade is also monitoring conditions ahead of widespread planting in South America, with the potential for a La Nina pattern to emerge in early 2023. Soybean meal was mostly firm, adjusting spreads, and bean oil was down on profit taking.

Corn was mixed, adjusting spreads. Private crop tour yield numbers are generally below a year ago and there are early harvest delays in the short-term forecast for the Delta. While the USDA’s production and yield estimates are expected to come down in the September 12^th update, significant adjustments will probably wait until harvest activity moves into the heart of the Corn Belt. U.S. export demand has slowed down, but near-term supplies remain tight. ANEC sees Brazil’s August corn exports at 7.5 million tons, large, but falling short of record levels. Corn is also watching the shipping pace out of Ukraine’s Black Sea ports, in addition to weather impacting production in Europe and China. The U.S. Energy Information Administration says ethanol production last week averaged 987,000 barrels a day, up 4,000 on the week and 54,000 on the year, while stocks hit a 15-week high at 23.807 million barrels, an increase of 361,000 from the previous week and 2.584 million from a year ago.

The wheat complex was higher on commercial and technical buying. Wheat remains focused on U.S. and world weather issues, mostly ignoring recent strength in the dollar. The spring wheat harvest is slow but should pick up steam soon in many areas, while the U.S. winter wheat harvest should wrap up soon. U.S. winter wheat producers have an eye on conditions ahead of new crop planting. Egypt bought 240,000 tons of wheat from Russia. Since the start of their marketing year July 1^st, Russia has reportedly exported 6.9 million tons of grain, 12% behind last marketing year. Russia’s invasion of Ukraine hasn’t just impacted Ukraine’s harvest, planting, and exports, but is also impacting Russia’s global trade to some extent. Following last weekend’s freeze, Brazil’s wheat growing areas are expected to warmer temperatures.