Market News
Soybeans lose more ground despite export sale to China
Soybeans were modestly lower on fund and technical selling. China did buy more new crop U.S. beans, another 126,000 tons, but Beijing is also buying beans from Brazil as a hedge against political tensions with the U.S. Trade talks between the U.S. and China regarding Phase One purchase obligations are scheduled for the 15th. Weekly old crop export sales were 22% lower than the four-week average and while new crop was below last a week ago, sales were still solid at 51.6 million bushels, mainly to China, Mexico, and unknown destinations. Aside from worsening drought conditions in parts of Iowa and less dry weather in other areas of the Midwest, near-term crop weather looks generally non-threatening. At this point, most private firms are anticipating a very large, possibly record large, crop this year with an all-time high for average yield. Soybean meal was down, following beans, and bean oil was mostly modestly higher on commercial spread trade.
Corn was narrowly mixed. Corn is also watching development weather, expecting a very large crop this year, maybe even record large, if recent estimates from private firms are any indication. Additionally, concerns about the crop’s condition in some areas are offset by much better conditions in other areas. The USDA’s new production and yield numbers are out on the 12th, along with updated supply and demand projections. With about a month left in the 2019/20 marketing year, export sales were 70% less than average, but new crop totaled 102.3 million bushels, primarily to China, unknown destinations, and Mexico. The new marketing year for corn gets underway September 1st. Ethanol futures were higher.
The wheat complex was lower on fund and technical selling, including new lows for September contracts in Kansas City and Minneapolis. The trade is monitoring the results of late U.S. winter wheat harvest and early spring wheat harvest activity. The global supply fundamentals are bearish and Egypt bypassed U.S. wheat again this week, purchasing 410,000 tons from Russia and Ukraine. DTN says Japan did buy 130,295 tons of food wheat from the U.S., Australia, and Canada, and South Korea picked up 57,400 tons of U.S. wheat. Weekly U.S. sales were a little bit better than average, with China the leading buyer, and shipments were above what’s needed to meet USDA projections for the 2020/21 marketing year. Lebanon reportedly has less than a month of grain available in reserves following the silo explosion in Beirut earlier this week. France’s ag ministry has 2020 soft wheat production at 29.71 million tons, 1.6 million less than in July and 25% below the 2019 total because of weather. Weather for winter grain planting in Ukraine is reportedly unfavorable.
