Market News

Soybeans up, corn mixed, monitoring weather

Soybeans were higher on commercial and technical buying. Near-term forecasts have mixed weather, generally better in eastern and central areas. Some of the drier growing areas have recently received rainfall and forecasts for later this week and early next week have generally gotten wetter, but that precipitation will still miss parts of the region. Beans will need a trend-line yield or better to meet demand expectations and boost supplies. Ending stocks estimates are historically tight through next marketing year, which doesn’t end until August 31^st, 2022. StoneX’s latest production projection is for a final crop of 4.332 billion bushels with an average yield of 50 bushels per acre, while Barcharts sees the crop at 4.4 million bushels with an average yield of 51 bushels per acre. The USDA’s most recent guess was 4.4 billion bushels with an average yield of 40.8 bushels per acre. The trade is also watching conditions in Brazil ahead of new crop planting. Soybean meal was higher and bean oil was lower, adjusting spreads. Bean oil ignored a higher overnight move in world vegetable oil prices.

Corn was mixed, adjusting spreads. Corn is also watching the weather and any potential impact to yields ahead of next week’s USDA projections, out in the supply and demand report on the 12^th. StoneX has the final crop at 14.945 billion bushels with an average yield of 176.9 bushels per acre and Barcharts sees production at 15 billion bushels with an average yield of 180.3 bushels per acre. In July, the USDA was anticipating a crop of 15.1 billion bushels and an average yield of 179.5 bushels per acre. Estimates for Brazil’s second crop continue to decline because of weather, with CONAB’s update out on the 10^th. The harvest is reportedly 47% complete, compared to the average pace of 63%. Brazil’s August corn exports are only expected to be about 3 to 4 million tons, compared to 6.7 million last year, because of the smaller than originally estimated crop. The U.S., Ukraine, and, to some extent, Argentina, are expected to pick up some of that business. Ethanol futures were unchanged. Ethanol production last week averaged 1.013 million barrels a day, down 1,000 on the week, but up 83,000 on the year, with stocks of 22.649 million barrels, 84,000 less than the previous week, but up 2.303 million from a year ago.

The wheat complex was mixed, with Chicago mostly weak, adjusting spreads, and Kansas City and Minneapolis lower. Rain is in the forecast for parts of the spring wheat region, but it remains to be seen how much that can help. The crop has been hit hard by drought in the northern and northwestern U.S. Plains and the Canadian Prairies. Those conditions have hit white winter wheat hard and there are early worries about dryness ahead of fall planting. There are also weather concerns in Russia and Europe. France’s ag ministry reduced its soft wheat estimate slightly, now at 36.69 million tons, with some quality concerns because of wet weather, but that’d still be above average and considerably larger than the 2020 total. The U.S. winter wheat harvest is ongoing with some of the biggest states either wrapped up or very close to ending for the season. DTN says Turkey bought 150,000 tons of milling wheat and Algeria picked up 50,000 tons of milling wheat, while Pakistan is tendering for 400,000 tons of wheat.