Soybeans, wheat up modestly on week, corn weak

Market News

Soybeans, wheat up modestly on week, corn weak

Soybeans were modestly higher on short covering and technical buying, posting modest week to week gains. Unknown destinations bought 126,000 tons of new crop U.S. beans, pushing the weekly total of announced sales to unknown and China to 1.517 million tons. The continued demand from China and unknown destinations, which is expected to turn out to be China, comes despite the continued political tensions between Washington D.C. and Beijing. Most forecasts have hot, dry weather in many areas into the coming week and the National Weather Service’s three-month outlook is generally hotter than normal with an equal chance of above or below normal precipitation in much of the Midwest. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. According to reports, as much as a fifth of the European Union’s soybean imports from Brazil could be from illegally deforested areas. Brazil is expected to planted record soybean area in the coming year.

Corn was modestly higher on short covering and technical buying but closed lower for the week. Parts of the region have had good rain over the past week, but storms were severe in some areas and weekend weather could stress crops. Most of the U.S. corn crop is either in or very close to the key pollination phase, critical for crop yields. With the lower than expected planted area, 2020 was probably not going to be a record crop and if realized, weather forecasts will further trim potential. New USDA production estimates are out August 12th, along with updated supply and demand projections. Ethanol futures were lower. The USDA’s attaché in Colombia says that nation’s Ministry of Trade, Industry, and Tourism is placing a two year $0.066 per kilogram import tariff on U.S. ethanol imports following an investigation into the government’s countervailing duty on U.S. ethanol. The attaché in South Africa says that nation’s 2019/20 corn crop was the second largest on record at 16.1 million tons, falling to 12.6 million in 2020/21 on later planting and lower planted area because of low domestic prices. The office does expect South Africa to remain a next exporter because of high domestic supplies. DTN says a South Korean feed mill bought 138,000 tons of corn, from either South Africa or South America.

The wheat complex was mostly modestly lower, with September contracts at the three U.S. exchanges closing firm for the week. The trade is watching the U.S. winter wheat harvest pace and spring wheat development conditions in the northern U.S. Plains and Canada. Some private sources have lowered production outlooks for some export competitors, particularly the European Union and Russia, but the USDA still expects a record world crop during the 2020/21 marketing year. France’s soft wheat harvest is reportedly 47% complete. The trade is also keeping an eye on dry weather in wheat growing areas of Argentina, with 91% of the crop planted according to the Buenos Aires Grain Exchange. Part of the week’s bearishness for wheat was also the lack of rumored demand from China surfacing. Export demand has been good, but it’s still early in the marketing year.