Soybeans down despite dry weather concerns
Soybeans were lower on fund and technical selling. Near-term conditions look mostly dry in many key U.S. growing areas, with a chance for rain in parts of the region late next week. Until then, temperatures are expected to rise across the region into next week and the crop could see some stress. Weekly new crop sales were strong, mainly to China and unknown destinations, while old crop had a net reduction following cancellations by unknown destinations and China. The 2019/20 marketing year for beans runs through the end of August. China and the U.S. will reportedly discuss trade “in the coming days”. Even with the U.S. discount to Brazil, China is still buying Brazilian beans as a hedge against political tensions. Soybean meal and oil followed beans lower.
Corn was fractionally lower on fund and technical selling. Weekly export numbers were neutral and the supply outlook remains bearish, which kept corn from moving into positive territory on weather concerns. Drought a big concern in parts of Iowa and, increasingly, parts of Nebraska, and the trade is waiting for better assessments of just how much of the crop was lost to last week’s derecho. Ethanol futures were lower. The Buenos Aires Grain Exchange expects Argentina’s 2020/21 corn planted area to be down 1.6% from 2019/20 because of dry weather, but still above the five-year average. Argentina, Brazil, Russia, and Ukraine have all become bigger players in the export market over the past few years. Ukraine’s Ag Ministry says 2020/21 corn exports are 502,000 tons, compared to 1.68 million tons this time last year. Ukraine’s new corn crop is estimated at 35 million to 37 million tons, compared to earlier record projections of 39 million tons, because of dry weather.
The wheat complex was modestly higher on short covering and technical buying, reversing course at midday. The dollar was up to start the day but moved lower during the session on higher than expected jobless claims, and while nothing has surfaced, there’s been more talk of new demand from China. The global supply fundamentals for wheat are bearish, limiting gains and the weekly export numbers were neutral at best. Sales were good, but shipments were less than what’s needed to meet projections for the 2020/21 marketing year. Dry weather is a concern for parts of the central and southern Plains ahead of winter wheat planting and the spring wheat harvest has been delayed further by rain in portions of the northern Plains. DTN says Japan bought 117,063 tons of food wheat from the U.S., Australia, and Canada, while Algeria purchased 50,000 tons of milling wheat from an unknown origin. Ukraine’s Ag Ministry says total grain exports are behind last marketing year’s pace, but that’s largely because of slower corn sales, not wheat.