Market News

Wheat up on weather concerns, dollar

Soybeans were mostly firm. The trade was watching harvest activity, expecting the USDA to report good progress in the weekly update. The USDA says 38% of U.S. soybeans have been harvested, compared to 20% last week and the five-year average of 28%, with 85% dropping leaves, compared to 82% on average, and 64% of the crop called good to excellent, unchanged on the week. The week kicked off with talk China bought more U.S. beans, but nothing was reported Monday. Inspections were bullish, mainly to China and Mexico. The trade is also watching weather in South America, with some rain possible for Argentina, but generally dry conditions expected in central Brazil. AgRural says that is delaying planting and could delay harvest activity. Argentina has officially announced reduced export taxes on soybeans and meal through the end of the year, with beans at 30% and meal at 28% through October, rising to 31.5% and 29.5% in November, 32% and 30% in December, and 33% and 31% starting January 1^st, 2021. Soybean meal was lower on that news and the unwinding of production spreads, which supported bean oil, along with a sharply higher move in crude oil. The USDA’s attaché in Malaysia estimates 2020/21 palm oil production at 19.7 million tons, down 1 million, with 2019/20 exports at 16.8 million tons, dropping to 7 million for 2020/21. The CME Group says open interest in soybean futures hit a record high last Friday at more than 1 million contracts.

Corn was narrowly mixed. Corn was also watching harvest activity, expecting good progress, even as many producers focus on beans. As of Sunday, 25% of corn is harvested, compared to 24% on average, with 87% mature, compared to 78% normally in early October, with 62% of corn in good to excellent shape, up 1% from last week. Mexico bought 160,020 tons of 2020/21 U.S. corn. So far, this marketing year, Mexico is the second biggest buyer of U.S. corn, after China and ahead of Japan. Weekly export inspections were bullish, primarily to China and Mexico. Ethanol futures were steady to weak. The USDA’s attaché in Brazil estimates 2019/20 corn production at 103 million tons, up 3 million from the last guess, with 2020/21 production at 107 million tons on an expansion in planted area. Most of that is expected to be in the second crop, the source of most of their exports.

The wheat complex was higher on short covering and technical buying, along with lower trade in the U.S. dollar index. Dry weather is a concern for winter wheat planting in the U.S. Plains, Russia, and Ukraine, and dry conditions during development for Australia. According to the USDA, 52% of winter wheat is planted, compared to 47% on average, and 24% has emerged, compared to the usual rate of 21%. New USDA supply, demand, and production numbers are out Friday at Noon Eastern/11 Central. The most pertinent changes for wheat are expected to be in the global supply and demand projections. Weekly export inspections were solid, with the leading weekly destinations of the Philippines and Nigeria. Jordan’s Ministry of Industry and Trade says the kingdom has a 17-month wheat reserve and wants to boost supplies further because of uncertainties created by coronavirus. France’s AgriMer says wheat shipments outside of the European Union during September were 166,000 tons, the lowest for any month in more than a decade. The USDA’s attaché for Brazil pegs 2020/21 wheat production at 6.6 million tons.