Market News

Soybeans mostly up, wheat down after USDA numbers

Soybeans were mostly higher on bull spreading. The USDA lowered the production and yield estimates slightly, while leaving new crop ending stocks unchanged at 200 million bushels. That would still be the tightest domestic supply in several years with more than 10 months left in the marketing year. The big adjustments for beans were larger beginning stocks and crush against smaller production and exports. Global production was up on a higher outlook for Brazil, with world exports also above a month ago. That included increases for both Argentina and Brazil, balancing out the decreases for Paraguay and the U.S. The USDA also raised the 2022/23 import guess for China to 98 million tons. The USDA’s next set of supply, demand, and production estimates is out Wednesday, November 9^th at Noon Eastern/11 Central. The trade’s focus now returns to South American planting, along with U.S. yield numbers and demand signals. The USDA’s attaché in Argentina says farmer selling during September topped 13.7 million tons, sparked by Buenos Aires’ adjusted exchange rate for beans, with almost 4 million tons of that directly headed to the export market, mainly to China. The office now has 2022/23 soybean production in Argentina at 49 million tons, below the official guess due to expected shifts in acreage away from beans to corn. China did buy 526,000 tons of U.S. beans Wednesday, the first announced outright purchase in nearly a month. Sustained demand by China is an uncertainty because of COVID lockdowns in some major cities. Soybean meal was up on commercial buying and bean oil was mostly higher, following soybeans.

Corn was narrowly mixed. The U.S. production and yield estimates were close to expectations and a little bit below last month, with the USDA also cutting the ending stocks outlook on that crop guess and a tighter old crop supply. The USDA did lower its ethanol and export use projections but for now, the domestic ending stocks guess remains above the 1-billion-bushel mark with more than three quarters remaining in the marketing year. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. Globally, corn ending stocks and production were down. The USDA left production and exports for South America unchanged, while raising the export guess for Ukraine because of the comparatively stronger movement of corn through the current Black Sea export corridor. The trade continues to watch U.S. harvest activity, in addition to planting in Argentina and Brazil. Interior movement in the U.S. is an issue in some areas because of low river levels, while concerns about a railroad strike are resurfacing, which would also impair movement.

The wheat complex was lower on fund and technical selling. U.S. wheat ending stocks were down from September, but larger than expected, with a smaller crop against the slowest exports in more than 50 years. Still, that domestic supply projection is the tightest in 15 years with more than half of the marketing year remaining. Global production was lower, but still potentially record large, with upward adjustments for the European Union and Brazil against a cut for Argentina due to drought. The USDA left Russia and Ukraine unchanged at 91 million and 20.5 million tons, respectively. For Russia, that’s below most other major estimates, while for Ukraine, that might be optimistic. The conflict between Russia and Ukraine is ongoing. The trade is also monitoring U.S. winter wheat planting. Recent rainfall in the Plains should help hard red winter, but it wasn’t enough to break the drought and the big test for conditions will be when the crop emerges from dormancy next spring. Soft red winter continues to look at generally comparatively good planting conditions.