Market News

Wheat gives back some gains

Soybeans were modestly higher on short covering and technical buying. The trade is monitoring COVID lockdowns in China and the impact on soybean demand, following some bearish August import numbers. China’s National Grain and Oil Information Center says domestic stocks ticked higher last week due to a slower crush pace. There was also some spillover from a higher move in bean oil, which helped offset some of the bearish influence from the lower trade in meal. Parts of the Midwest are expected to see rain this weekend, potentially stabilizing yields ahead of harvest. CONAB says Brazil’s soybean crop totaled 125.552 million tons, up 1.2% from August, but down 9.9% from 2021 due to adverse weather conditions in some areas. New crop planting will get under in Brazil later this month. The recent change Argentina’s exchange rate for soybeans has been a success, sparking an increase in farmer selling. The USDA’s weekly export sales numbers are delayed until September 15^th.

Corn was modestly lower on fund and technical selling. Corn is watching demand from China and late U.S. development weather, along with potential export issues for Ukraine. The bulk of Ukraine’s exports since the resumption of movement out of the Black Sea has been corn, with lesser amounts of other grains. Updated USDA supply, demand, and production numbers are out on the 12^th. That will include an updated look at the global numbers. CONAB says Brazil’s soybean crop totaled 113.272 million tons, 1.2% less than last month, but 30.1% more than last year thanks to increased planted area and comparatively fewer weather issues during key growing periods. Second crop production was 86.121 million tons, a jump of 41.8% on the year. The U.S. Energy Information Administration says ethanol production last week averaged 989,000 barrels a day, up 19,000 on the week and 69,000 on the year, with stocks of 23.138 million barrels, the tightest supply since June and a decrease of 395,000 from the previous week, but up 2.748 million from a year ago.

The wheat complex was lower on profit taking and technical selling. The export situation for Ukraine remains fluid, but recent complaints from Russian leader Putin might signal a change to the agreement. One of the other major parties in that agreement, Turkey’s Erdogan, has concurred with Putin’s complaints, while Ukrainian leader Zelensky has refuted all claims. Russian attacks on Ukrainian soil are ongoing, including the recent destruction of a major grain storage facility and actions against the nation’s largest nuclear power plant. Ukraine has made progress in fighting those attacks in some areas, but disruptions to harvest, planting, and interior movement continue. U.S. spring wheat yields are good, even with harvest slower than normal. CONAB says Brazil produced a record 9.366 million tons of wheat this year. Brazil is typically a net importer of wheat, sourcing most of its supplies from Argentina. A group of grain growers in France pegs soft wheat production at 33.6 million tons, compared to the most recent ag ministry guess of 33.87 million.