Market News

Wheat gains on Putin export comments

Soybeans were lower on fund and technical selling. Contracts were up early but couldn’t follow through due to the drop in crude oil and demand uncertainties. Beans continue to monitor U.S. development weather, along with the impact of COVID lockdowns in China. There have been a few USDA reports of soybean sales to China in the last couple of weeks, but the actual scale of those sales is unknown due to the recent issues with the USDA’s export sales reporting system. The next weekly export sales report will be out September 15^th. China’s General Administration of Customs says August soybean imports were 7.17 million tons, a drop of 24.5% on the year due to slow demand and high prices. Soybean meal was higher on an oversold bounce, but also closed below the session highs, while bean oil was down on that collapse in crude. Beans are also keeping an eye on planting conditions in Argentina and Brazil.

Corn was modestly lower on fund and technical selling, closing near the session lows after some early gains. Corn is monitoring yield projections ahead of next week’s updated USDA numbers. The USDA is expected to lower its yield estimates, leaving the major questions A) by how much and B) whether or not there will be any major adjustment to acreage. The numbers are out Monday, September 12^th at Noon Eastern/11 Central. Mexico bought 257,400 of U.S. corn Wednesday morning, with 226,920 tons for 2022/23 delivery and 30,480 tons for 2023/24. The 2022/23 marketing year for corn, and soybeans, started September 1^st. The Renewable Fuels Association says July ethanol exports were 107.2 million gallons, up 6% from June and the tenth month in a row above 100 million, while DDGS exports were a six-month high at 1.06 million tons, an increase of 5% on the month.

The wheat complex was higher on commercial and technical buying. Comments by Russian leader Vladimir Putin are throwing the Black Sea export agreement into question. There’s been little interference from Russia in Ukraine’s exports out of those key Black Sea ports, but Putin says the West isn’t aiding Russian shipments under the agreement and Ukraine’s shipments aren’t going where they’re supposed to, with Moscow expected to talk to Turkey about revising the agreement. Of course, as Russia continues to attack Ukraine, including grain storage at Black Sea ports and nuclear infrastructure, there’s always the chance Russia’s leader decides to throw out the agreement altogether without consulting Turkey or the U.N. In other words, what had been a stabilization of one facet of Ukrainian life under attack might be thrown back into chaos by the mercurial and calculating former KGB chief. Egypt is reportedly negotiating a replacement for a Ukraine wheat shipment held in quarantine. Fundamentally, if Ukraine’s exports are halted again, that just exacerbates the global supply woes, with the USDA projecting the tightest world carryover in years after China is taken out of the equation. The dollar did make new highs during Wednesday’s session but weakened as the day’s trade progressed. Stateside, the spring wheat harvest is slower than normal, with winter wheat planting underway.