Market News

Soybeans resume lower trend with corn, wheat down

Soybeans were lower on fund and technical selling. There’s been more rain in some of the drier parts of the Midwest, stabilizing conditions during a key development period for beans. Forecasts for the coming week are generally cooler and wetter, which is expected to boost USDA condition ratings, which have been near historic lows for most of the growing season. Soybean meal was lower, following beans, while bean oil was mixed on bull spreading, supporting nearby contracts, while pressuring deferred months. StoneX is projecting 2023/24 Brazil soybean production at 163.5 million tons, which would be up 3.7% from the record 2022/23 crop. Planting starts in some areas next month. CONAB’s updated outlooks for Brazil are scheduled for August 10^th. The broader markets were also bearish in general for commodities following Fitch’s downgrade of the U.S. credit rating.

Corn was lower on fund and technical selling. Corn is also watching the weather, with mostly beneficial rainfall, but some areas have seen highly localized flooding. Ethanol margins are strong, canceling out some of the impact of slow exports. The U.S. Energy Information Administration says production last week averaged 1.067 million barrels a day, down 27,000 from the prior weeks near two-year high, but up 24,000 from a year ago, while stocks fell 368,000 on the week and 534,000 on the year to 22.86 million barrels. Ethanol exports averaged 141,000 barrels per day, a jump of 55,000 on the week for the highest volume since April 2022. Brazil’s second crop corn harvest has reportedly passed the halfway point. Production is expected to be record large, which has helped Brazil keep near-term control of the global corn market, especially with the current absence of Ukraine. Both Ukraine and Brazil have supplanted the U.S. as a key corn source for China. The USDA’s weekly export sales numbers are out Thursday morning. The new marketing year for corn, and soybeans, starts September 1^st.

The wheat complex was lower on fund and technical selling, unable to sustain overnight gains with a higher move in the dollar. Forecasts for the spring wheat region are mixed, with rain missing some of the drier growing areas of the northern U.S. Plains and Canada. Still, parts of that region have received some much-needed rainfall along with cooler temperatures, which are expected to stabilize crop conditions. Export prospects for Ukraine are evaporating following another round of strikes on infrastructure by Russia. Russia continues to control the global wheat market due to a significant price advantage. Dry weather is an issue for crops in parts of the U.S., Australia, and Canada, with global supplies projected at a multi-year low and the USDA’s next round of supply and demand estimates out August 11^th.