Soybeans, corn pop higher on weather concerns

Market News

Soybeans, corn pop higher on weather concerns

Soybeans were higher on fund and technical buying. The USDA’s national condition rating was down 3% at 69% good to excellent, with big drops in several states. Near-term weather generally looks hot and dry across the region. Depending on what happens with Hurricane Laura, some of the drier parts of the Midwest might miss out on rain and while cooler temperatures would be welcome, the crop needs water during these key phases of development. No new talks have been scheduled, but U.S. and Chinese trade officials are reportedly optimistic about the Phase 1 trade agreement. Tuesday, China bought 204,000 tons of U.S. soybeans and unknown destinations purchased 142,500 tons, both for new crop delivery. Soybean meal and oil followed beans higher. CONAB estimates Brazil’s 2020/21 bean crop at 133.5 million tons, with a 3% increase in planted area, and exports of 86.79 million tons, up 5.8% from 2019/20, with the potential for 80% of that to go to China.

Corn was higher on fund and technical buying. The good to excellent rating for U.S. corn dropped 5% to 64%, with the poor to very poor category up on the week. Rainfall from Hurricane Laura later this week could miss some of the drier areas, but temperatures are expected to be cooler. The USDA is expected to lower yield and production numbers next month on the drought or near drought conditions in parts of the Corn Belt and the recent derecho. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. CONAB expects Brazil’s 2020/21 corn crop to total 112.9 million tons, with planted area rising 7%. Most of that would be the second crop, with CONAB projecting exports at 39 million tons, an increase of 13% from the previous marketing year. The USDA says China picked up 408,000 tons of U.S. corn and Japan purchased 100,000 tons, all for 2020/21 delivery.

The wheat complex was higher on fund and technical buying. The trade responded to a lower move in the dollar and recent lower production estimates for the European Union. Still, some of those E.U. losses are expected to be made up by higher production in other nations and the USDA is projecting a record global supply. The USDA’s next set of supply, demand, and production numbers is out September 11th. The trade is also monitoring dry weather in parts of the central and southern U.S. Plains ahead of winter wheat planting. DTN says Pakistan bought 210,000 tons of wheat from an “unknown origin”, while Jordan is tendering for 120,000 tons of milling wheat, Taiwan is looking for 100,645 tons of milling wheat, and Japan is in the market for 100,956 tons of food wheat from the U.S. and Canada. The rumors persist, but China hasn’t made any announced purchases of U.S. wheat recently. Kazakhstan’s government says there will be 7.5 million to 8 million tons of grain available for export during the 2020/21 marketing year.