Market News

Soybeans up, following vegetable oils

Soybeans were higher on fund and technical buying. Contracts bounced off of the recent lows, with help from strength in global vegetable oils. That demand linked strength in canola and palm oil also buoyed soybean oil, in addition to a higher move in energies. Soybean meal was modestly lower on product spread adjustments linked to the comparatively slow demand. StoneX projects this year’s U.S. crop at 4.436 billion bushels with an average yield of 51.3 bushels per acre, both up from their prior expectations. IHS Markit has the crop at 4.421 billion bushels with an average yield of 51.1 bushels per acre. U.S. harvest activity is ahead of average, while planting in Brazil is underway, with AgRural reporting progress at 4% complete. CONAB’s first estimates for Brazil’s new crops are out Thursday, October 7^th. Demand from China is a question mark this week due to a national holiday.

Corn was modestly lower on fund and technical selling. The corn harvest is ahead of average with near-term forecasts showing only minor rain delays. Corn, and soybeans, will need a trend-line yield or better to bolster supplies, meet demand, and limit further price inflation for end users. The latest guess for the U.S. crop from StoneX is 15.022 billion bushels, up a little from the most recent estimate, with an average yield of 176.6 bushels per acre, down slightly, but above many other private firms, for now. IHS Markit pegs corn at 15.085 billion bushels with an average yield of 176.8 bushels per acre. The USDA’s next set of supply, demand, and production numbers is out on Tuesday, October 12^th. For next year, the big concern is fertilizer availability. Corn continues to monitor the full return of export facilities at the Louisiana Gulf following damage from Hurricane Ida. Near-term forecasts have rain in corn growing areas of Brazil, with less amounts for Argentina. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The Renewable Fuels Association says ethanol exports during August were 80.48 million gallons, up 56% from July, mainly to Canada, South Korea, the United Kingdom, Peru, and Nigeria. DDGS exports were a six-year high at 1.24 million tons, an increase of 17% on the month, primarily to Mexico, Vietnam, and Turkey. Year-to-date ethanol exports are 796.3 million gallons, 10% behind 2020, with DDGS at 7.73 million tons, 10% ahead of a year ago.

The wheat complex was lower on fund and technical selling. Nearly half of the U.S. winter wheat crop is planted, close to normal with several key states around 75% complete. Recent rainfall has helped the pace in hard red winter growing areas, while total acreage continues to be an uncertainty for white winter wheat due to pervasive drought conditions in the northwestern U.S. Plains. The trade is also watching winter wheat planting in Russia and Ukraine, along with development conditions in Argentina and Australia. Export demand for U.S. wheat remains relatively slow, even as world supplies shrink and Russia’s export tax moves higher. Moscow has announced a wheat export quota of 31.5 million tons will go into place in February 2022. DTN says Ethiopia is tendering for 300,000 tons of milling wheat, while Japan is in the market for 130,963 tons of food wheat from the U.S., Australia, and/or Canada.