Market News

Wheat extends gains, corn up

Soybeans were mixed, mostly modestly lower. Beans adjusted spreads while watching U.S. harvest activity, with near-term delays in some areas, along with planting in South America. Stateside, 79% of U.S. soybeans are harvested, compared to the five-year average of 81%. AgRural says 52% of Brazil’s soybean crop is planted, compared to 38% last week and 42% last year. The big question for South America is the impact of the impending La Nina weather pattern. China bought 132,000 tons of 2021/22 U.S. soybeans Monday morning. Export inspections were nearly 2.3 million tons, but down on both the week and the year, mainly to China and Mexico. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. The USDA says 164 million bushels of soybeans were crushed during September, a decrease of 4 million on the month and 7 million on the year. Canola futures were higher on slow farmer selling in Canada.

Corn was solidly higher on commercial and technical buying. Corn is also watching U.S. harvest activity, in addition to planting and development conditions in Argentina and Brazil. The USDA says 74% of U.S. corn is harvested, compared to 66% on average. AgRural says 63% of Brazil’s first corn crop is planted, compared to 53% a week ago and 54% a year ago. Brazil’s first crop is the smaller of the two main crops, with the second crop planted after soybeans are harvested. Ethanol demand has improved and the U.S. price advantage should help export sales. Export inspections were down on the week and the year, with the 2021/22 pace continuing to trail 2020/21. Mexico and Japan topped the weekly list. Ethanol futures were unchanged. The USDA says September corn for ethanol use was 407.513 million bushels, down 2% from August, but up 1% from September 2020, while DDGS production of 1,761,034 tons was 4% less than the previous month, but 1% more than last year.

The wheat complex was sharply higher on commercial and technical buying, with December Chicago, Kansas City, and Minneapolis all closing at contract highs. The big drivers continue to be the tightening world supply and rising global prices. Even if demand for U.S. wheat isn’t great, global demand is strong, with Saudi Arabia reportedly buying nearly 1.3 million tons of wheat from an unspecified source or sources and very high offers in Egypt’s weekly tender. Russia’s wheat prices moved higher again last week, as did their export tariff. The December Chicago and Minneapolis contracts both hit multi-year spot highs as well as those new contract highs. Most near-term forecasts have precipitation in the central and southern U.S. Plains, but that could miss some of the drier areas. As of Sunday, 87% of U.S. winter wheat is planted, compared to 86% on average, and 67% has emerged, compared to 68% normally this time of year, with 45% of the crop called good to excellent, 1% less than last week. The trade is also watching planting weather in Russia and Ukraine, along with development conditions in Argentina and Australia. The USDA says the wheat grind for the third quarter of 2021 was 230.807 million bushels, 3% higher than Q22021, but 1% lower than Q32020. Nearly five months into the marketing year, wheat inspections are behind last marketing year. The leading destinations last week were Mexico and Honduras.