Market News

Soybeans up on bounce in export demand

Soybeans were modestly higher on commercial and technical buying. China bought 132,000 tons of new crop U.S. beans, the fifth business day in a row with an announced sale to either China or unknown destinations, with a running total of 1.649 million tons. There was also spillover support from a rally in global vegetable oil prices heading into the session, but that waned as bean oil moved down from the session highs. The USDA says 64% of U.S. soybeans are blooming, compared to the five-year average of 57%, and 25% has reached the pod setting stage, compared to 21% on average, with 69% of the crop rated good to excellent, up 1% on the week. Soybean meal was higher on commercial buying, while bean oil finished narrowly mixed, mostly unable to follow through on the early gains. Bean oil was up solidly to start the day following comments by the Malaysian Palm Oil Association that nation could lose up to 25% of potential palm oil yield due to a lack of workers. Flooding is also an issue in parts of Malaysia and Indonesia. Weekly soybean export inspections were bearish. Safras e Mercado projects the 2020/21 soybean crop for Brazil at 131.7 million tons, up 5.4% from 2019/20, if realized.

Corn was modestly lower on profit taking and technical selling. Parts of the Corn Belt got rain over the weekend, including heavy rain in some areas, with more in the forecast for most of this week. As of Sunday, 59% of U.S. corn is silking, compared to 54% on average, with 9% at the dough making stage, compared to the usual pace of 7%, and 69% of the crop is in good to excellent shape, steady with last week. The trade is also keeping an eye on temperatures around the region. Temperatures generally look less hot than what was forecast last week, but that could change and conditions might still be hot enough to stress crops in some areas, depending on recent rainfall. Ethanol futures were lower. Weekly export inspections were bullish with just about a month and a half left in the 2019/20 marketing year. The USDA’s attaché in Mexico estimates 2020/21 corn production at 28 million tons, compared to 26.1 million in 2019/20, with imports this marketing year at 18.3 million tons, compared to 16.5 million a year ago. Safras e Mercado has Brazil’s 2020 corn crop at 116 million tons, an increase of 7.5% from 2019.

The wheat complex was lower on fund and technical selling. The trade expects a good week to week advance for the winter wheat harvest. Spring wheat conditions could improve following recent rain in the northern U.S. Plains. For winter wheat, 74% of the crop is harvested, compared to 75% on average. For spring wheat, 91% of the crop has headed, compared to 94% normally, and 68% of the crop is called good to excellent, unchanged from last week. Weekly export inspections were slightly bullish, just over a month and a half into the 2020/21 marketing year. DTN says Japan bought 126,000 tons of food wheat from the U.S., Australia, and Canada. The USDA’s attaché for Australia estimates 2020/21 wheat production at 27 million tons, up 78% from 2019/20 thanks to higher planted area and better yields, with exports of 17.5 million tons, compared to 9.2 million the previous marketing year. The office in Mexico pegs 2020/21 wheat production at 3.05 million tons, compared to 3.27 million a year ago, with exports of 5.25 million tons, compared to 5.2 million last year.