Modest gains for corn, soybeans, and wheat
Soybeans were higher on short covering and technical buying, bouncing off the session’s lows. China and unknown bought more U.S. beans, the seventh business day in a row with announced sales, even as tensions between the U.S. and China rise. Two sales were listed as heading to China: 453,000 tons, with 66,000 for 2019/20 and 387,000 tons for 2020/21, and 262,000 tons, all for 2020/21 delivery, and the sale to unknown destinations was 211,300 tons, also all for 2020/21 delivery. That brings the cumulative total over the past seven business days to 2,881,300 tons, mostly new crop. The new marketing year for soybeans starts September 1st. Grains and oilseeds in general also benefited from a weak move in the U.S. dollar, which helps export competitiveness. Near-term U.S. crop weather looks mostly non-threatening. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.
Corn was higher on short covering and technical buying. Corn is also watching the weather, with seasonal temperatures and rain in many areas heading into August. The U.S. Energy Information Administration says ethanol production last week was down 23,000 barrels at an average of 908,000 barrels a day, the first decline since April, and stocks of 19.801 million barrels are the tightest since the end of 2016. The week to week decrease in production can be tied to lower prices and concerns about demand as COVID-19 cases rise in parts of the U.S. In addition to the increased demand for soybeans, China has also been buying corn from the U.S. as Beijing tries to reduce domestic corn prices, which have surged because of tight supplies. The USDA’s weekly export sales numbers are out Thursday morning. U.S. prices remain at a premium to Ukraine, Argentina, and Brazil. Ethanol futures were higher.
The wheat complex was modestly higher on short covering and technical buying. The trade is watching spring wheat development weather in the northern U.S. Plains and Canada, along with harvest activity in the U.S., Europe, and the Black Sea region. Russian wheat prices have moved higher on the slow pace of harvest activity and concerns about dry weather for their spring wheat crop. New supply and demand estimates are out August 12th, including updated global production projections. Private firms and the USDA’s Foreign Ag Service have recently lowered expectations for some key export competitors but raised outlooks for others. DTN says Jordan bought 60,000 tons of milling wheat after initially tendering for 120,000 tons and according to reports, Pakistan bought “at least” 300,000 tons of wheat from the Black Sea region. China will reportedly release wheat and rice from state reserves to animal feed producers in an effort to stem the rise of domestic corn prices.