Soybeans up ahead of weekly USDA crop numbers

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Soybeans up ahead of weekly USDA crop numbers

Soybeans were higher on fund and technical buying but ended the session closer to the session’s lows than the highs. The USDA was expected to lower the national good to excellent rating following recent weather issues. The USDA says 66% of U.S. soybeans are in good to excellent shape, 3% lower than a week ago, with 95% at the pod setting stage, compared to the five-year average of 93%, and 8% dropping leaves, matching the average pace. Some of the drier areas of the Midwest had less than half of normal rainfall in August and parts of the region will continue to see a dry near-term pattern, while other areas should see near ideal conditions. Weekly export inspections were towards the low end of estimates, mainly to China and Mexico. The trade is also watching weather in Brazil ahead of widespread planting. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. According to Statistics Canada, canola production is currently projected at 19.403 million tons, down 0.4% on the year, and Canada’s soybean crop is seen at 5.962 million tons, 1.4% lower than 2019, with better yields for both canceled out by lower harvested area.

Corn was mostly lower on spread trade and profit taking. Corn was also watching the weather, including extreme drought in parts of Iowa. The USDA’s next yield guess will be lower, the question is by how much. As of Sunday, 62% of U.S. corn is in good to excellent shape, 2% lower, with 94% at the dough making stage, compared to 89% on average, 63% has dented, compared to 56% normally in late August, and 12% is mature, compared to 10% on average. China bought 596,000 tons of new crop U.S. corn, but weekly inspections were bearish. That brings the running total of announced sales over the past three business days to 1,767,032 tons, all new crop, all to either China or unknown destinations. The 2020/21 marketing year for corn, sorghum, and soybeans starts September 1st. Ethanol futures were higher. Statistics Canada estimates 2020 corn production at 13.928 million tons, up 3.9% on the year, as a 7.5% gain in yield offsets a 3.4% loss in acreage.

The wheat complex was steady to modestly higher. The dollar was down, there are scattered world crop weather issues, and some U.S. spring wheat growing areas will see more harvest delays this week. The winter wheat harvest is basically over, with concerns about dry weather ahead of new crop planting. For winter wheat, harvest is officially over, but some areas might still need to be collected. For spring wheat, 69% is harvested, compared to 77% on average. The Rosario Grain Exchange says wheat conditions in Argentina continue to deteriorate due to dry weather and drought. Still, losses in Argentina and other nations will largely be offset by larger crops from other key exporters. Statistics Canada has total wheat production at 35.74 million tons, up 10.5% from 2020, with spring wheat at 25.935 million tons, 1% higher, durum at 6.926 million tons, a jump of 39.2%, and winter wheat at 2.879 million tons, a gain of 69.3%. IKAR sees Russia’s crop at 82.8 million tons, up 300,000 from the previous guess. The USDA’s next set of supply and demand estimates is out September 11th. Weekly export inspections were towards the low end of analysts’ estimates. DTN says South Korea is tendering for 70,000 tons of feed wheat.