Market News
Soybeans, corn fall further on weather forecasts
Soybeans were sharply lower on fund and technical selling. Parts of the Midwest and Plains are seeing rain to start the week, with more on the way for some areas. The USDA says 52% of U.S. soybeans are in good to excellent condition, 2% lower than last week, with 83% blooming and 50% at the pod setting stage, both faster than average. China bought 132,000 tons of new crop U.S. beans, the fifth of the last six business days with an announced sale. The running total is 1,919,460 tons, all for 2023/24 delivery, after September 1st, with a big chunk of that to unknown destinations. If those purchases aren’t canceled, at least some of that will head to China next marketing year. The Philippines Monday bought 183,200 tons of 2023/24 U.S. bean meal, for delivery after October 1st, as the U.S. continues to fill at least part of the vacuum left by Argentina after their much smaller 2023 crop. Export inspections last week were above the week before, but below a year ago, mainly to Mexico and Japan. Shipments to China were routine, reflecting Beijing’s recent reliance on Brazil for beans. Soybean meal and oil were lower, following the lead of beans. Bean oil had additional pressure from a recent drop in palm oil.
Corn was sharply lower on fund and technical selling. Corn is watching the weather ahead of the USDA’s first field survey-based yield guess of the season on Friday, August 11th. As of Sunday, 55% of the crop is rated good to excellent, down 2%, with 84% of the crop silking, compared to 82% on average, and 29% at the dough making stage, matching the normal pace. Export demand for U.S. corn remains slow, but ethanol margins are solid. Brazil has a big chunk of the global corn market and could assume more of the market share with a lot of uncertainties about exports from Ukraine. China has been a big customer of both Brazil and Ukraine. U.S. export inspections last week were higher than the previous week, but lower than last year, primarily to Mexico and Japan. Harvest of Brazil’s second crop is ongoing, with an updated outlook from Brazil’s government scheduled for August 10th. Argentina’s corn exports have reportedly picked up steam following a currency devaluation by Buenos Aires.
The wheat complex was sharply lower on fund and technical selling. A spring wheat crop tour showed lower than a year ago yields in the northern Plains, but the numbers were still mostly better than expected. For spring wheat, 42% of the crop is rated good to excellent, a drop of 7%, with 97% and 2% harvested, both behind average. For winter wheat, 80% of the crop is harvested, compared to the five-year average of 83%. The trade is also watching weather in Canada, India, and Australia. Russia continues to hold the upper hand on the export market, due to price, while Ukraine’s exports have dried up, at least through the Black Sea, following the collapse of the grain trade pact governing movement. The European Union is continuing to explore alternative avenues to ship grain from Ukraine. U.S. export inspections were up on the week and the year, with China and Mexico leading the way.
