Market News
Soybeans, corn mixed after purchases by China
Soybeans were steady to modestly lower, but still closing modestly higher on the week. Most forecasts had at least some rain in the Midwest late in the coming week, likely easing stress on part of the crop. Until then, much of the region is expected to remain dry, with warmer temperatures. At this point though, many projections have a very large crop, even if the potential has been trimmed somewhat by recent weather, including the derecho. China and unknown destinations bought new crop U.S. beans, 400,000 and 368,000 tons, respectively. The new marketing year starts September 1st. China’s Commerce Ministry says there will be trade discussions soon, but that has been denied by the White House. China is also buying beans from Brazil as a hedge against the political tensions with the U.S., even with the substantial U.S. price advantage. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was mixed, mostly modestly higher, finishing the week modestly higher. Corn was also watching the weather for potential stress, along with yield projections from private crop tours and continued damage assessments following the recent derecho. A major private crop tour this week did find a lower than a year ago yield for Iowa, which has not only been affected by the derecho, but also drought. Some of the crop has been lost, the question of how much might not be fully answered until harvest is over. The USDA’s next set of supply, demand, and production numbers are due September 11th and the official 2020 production totals are out in January. China purchased 405,000 tons of new crop U.S. corn. U.S. corn prices are now at a discount to Brazil, which could help export competitiveness. State media in China says the fall armyworm has been found in their northeastern corn belt for the first time. DTN says hotter than normal weather is impacting corn production in France. Ethanol futures were lower.
The wheat complex was higher on short covering and technical buying, capping off a week of solid gains. Contracts were down early on the dollar and global supply fundamentals but managed to rally around midday. There’s been more talk about China buying U.S. wheat, but no confirmation. China’s most recent announced purchase of U.S. wheat was 130,000 tons of U.S. hard red winter earlier this month. China has reportedly recently purchased wheat from France. Wheat planting in Argentina has wrapped up, with dry weather reducing planted area and probable damage from a frost this week. Stateside, the U.S. winter wheat harvest should wrap up soon, but there are expectations for more spring wheat harvest delays. The complex is also watching weather in the southern and central U.S. Plains ahead of new crop winter wheat planting.
