Market News

Soybeans up on China optimism

Soybeans were modestly higher on short covering and technical buying. The U.S. and China have agreed on principles for Phase One of the trade deal, but nothing has been signed. Negotiations are ongoing at a deputy level. Beans are also watching South American planting weather and U.S. harvest activity. The USDA reports 75% of this year’s U.S. soybean crop is harvested, compared to the five-year average of 87%. FC Stone sees U.S. soybean production at 3.593 billion bushels with an average yield of 47.5 bushels per acre, Informa has the crop at 3.553 billion bushels with an average yield of 47 bushels per acre, and Allendale pegs production at 3.541 billion bushels with an average yield of 46.82 bushels per acre. Weekly export inspections were bullish, now more than 10% ahead of the previous marketing year, due in large part to demand from China, along with a recent higher move in Brazil’s prices. Recent rain is helping in South America, but more will be needed. Argentinian producers are also waiting to see what kind of changes will be made to export taxes under the incoming presidential administration.

Corn was modestly lower on fund and technical selling. Corn was expecting the USDA to report mostly good harvest progress in the last few days, aside from continued delays in some areas. As of Sunday, 52% of U.S. corn is harvested, compared to 75% on average, with 96% of the crop at maturity. 58% of U.S. corn is in good to excellent condition, unchanged on the week, but 10% below a year ago. Allendale now projects 2019 U.S. corn production at 13.785 billion bushels with an average yield of 168.49 bushels per acre, Informa has the crop at 13.792 billion bushels with an average yield of 167.5 bushels per acre, and FC Stone sees corn at 13.911 billion bushels with an average yield of 170 bushels per acre. Corn is waiting for passage of the USMCA and there’s talk China’s corn supply is tight enough Beijing might be in the market for U.S. corn soon. Slow export demand continues to be a big bearish factor for corn, with another bearish week for inspections. Still, demand could improve if prices in Argentina and Brazil keep moving higher. Of course, that does leave Ukraine as a significant competitor. Most forecasts do have a slightly drier pattern for parts of Brazil and more rain for corn growing areas of Argentina. Ethanol futures were mostly lower.

The wheat complex was modestly lower on fund and technical selling. Dry parts of eastern Australia did get rain over the weekend, but too late for some of the grain crop. According to Allendale, 4% of Argentina’s wheat crop is harvest, but with some rain in the medium-term forecast, while 54% of France’s soft wheat crop is planted, a big jump from the prior week. Losses in Argentina and Australia will likely by offset by bigger crops in Russia and the European Union. Stateside, 89% of U.S. winter is planted, compared to 88% normally, while 71% has emerged, compared to the usual pace of 74%. 57% of winter wheat is in good to excellent shape, up 1% on the week and 6% on the year. Allendale pegs the 2019/20 all wheat crop for the U.S. at 1.957 billion bushels with an average yield of 51.43 bushels per acre, with winter wheat accounting for 1.304 billion and non-durum spring wheat at 594 million bushels. New USDA supply, demand, and production numbers are out Friday at Noon Eastern/11 Central. Export inspections were down on the week and the year, but the 2019/20 pace remains ahead of 2018/19. Tunisia is tendering for 50,000 tons of milling wheat.