Soybeans, corn up, watching development weather
Soybeans were higher on speculative and technical buying, with the November contract hitting a multi-month high. Most forecasts have a drier weather pattern in many areas this week, potentially stressing the crop as it moves through key phases of development. Ahead of the weekly numbers, last week’s derecho was expected to lower the USDA’s national crop condition rating. The USDA says 72% of U.S. soybeans are rated good to excellent, down 2% on the week, with 96% of the crop blooming, compared to the five-year average of 94%, and 84% at the pod setting stage, compared to 79% on average. Soybean meal and oil were also higher, with meal in the lead on strong demand expectations. A tribe in Brazil is reportedly blocking the BR-163 highway, a critical route for shipping grains, citing a lack of governmental support during the nation’s coronavirus outbreak and the construction of a railroad parallel to the highway. AgRural sees 2020/21 soybean production for Brazil at 129.3 million tons. U.S. export inspections were down on the week and the year, mainly headed to China and the Netherlands. The NOPA says member firms crushed 172.794 million bushels of soybeans during July, a little more than expected and 3% above a year ago.
Corn was higher on fund and technical buying. Corn was anticipating at least some reduction in the USDA’s national good to excellent rating after last week’s storm in the Midwest. As of Sunday, 69% of U.S. corn is in good to excellent shape, 2% lower than a week ago, with 76% of the crop at the dough making stage, compared to 69% usually in mid-August, and 23% of the crop dented, compared to 24% on average. The recent USDA numbers and some private crop tours haven’t factored in that damage, which impacted several million acres in the Corn Belt and caused billions of dollars of damage in Iowa alone. The full extent of the damage to what is still currently expected to be a record crop won’t be known for some time. On farm storage is also a concern. Ethanol futures were higher. Corn export inspections were down on the week, up on the year, with China and Mexico the biggest destinations. The 2020/21 marketing year for corn starts September 1st.
The wheat complex was higher on fund and technical buying. The dollar was lower during the session, helping export competition, and unknown destinations bought 130,000 tons of 2020/21 U.S. hard red winter ahead of the open. Crop estimates for export competitors have been mixed, with increases for some and decreases for others. Strategie Grains says wheat harvest has ended in Germany and Poland. For winter wheat, 93% of the crop is harvested, compared to 96% usually this time of year. The trade is also watching weather in the U.S. Plains ahead of new crop winter wheat planting. For spring wheat, 70% of the crop is called good to excellent, 1% above a week ago, with 30% harvested, compared to 43% on average. Weekly export inspections were lower than the previous week and the year before, but the 2020/21 pace remains ahead of 2019/20. DTN says Turkey is tendering for 390,000 tons of wheat and 110,000 tons of durum, while Algeria is in the market for 50,000 tons of milling wheat.