Crop concerns, demand support soybeans, corn

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Crop concerns, demand support soybeans, corn

Soybeans were modestly higher on short covering and technical buying. Near-term forecasts do have rain in parts of the Midwest, but it still might miss some of the drier parts of the region. That includes the expanding drought in areas of Iowa and Nebraska. Allendale’s producer survey pegs the 2020 U.S. soybean crop at 4.311 billion bushels with an average yield of 51.93 bushels per acre, less than what the USDA was anticipating last month because of weather woes. The trade is also watching weather in South America ahead of widespread planting. Brazilian export group ANEC estimates September soybean exports at 4.19 million tons, with 2020 exports at 82 million tons. Brazil’s bean exports for August were 6.2 million tons, compared to 5 million in August 2019. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Oil picked up additional support from strong global veg oil demand, some of which spilled over into beans. The USDA’s attaché for the European Union pegs 2020 rapeseed production at 16.6 million tons, the lowest in a decade, compared to 17.025 million for 2019, citing the ban on neonicotinoids making production more expensive and difficult, with soybeans at 2.79 million tons, compared to 2.76 million last year. Vegetable oil crush demand is expected to be slightly below a year ago, while meal feeding could be slightly higher.

Corn was modestly higher on short covering and technical buying. Corn is also watching the weather and private yield estimates ahead next week’s USDA supply, demand, and production report. Following a survey of producers, Allendale has U.S. corn production at 14.98 billion bushels with an average yield of 178.28 bushels per acre, both below the August USDA projections because of dry weather in key growing areas and the derecho storm. Parts of the northern Midwest could see a frost next week. The recent spike in demand from China provided continued support, with the USDA’s weekly numbers out Thursday morning. China has stepped up purchases of U.S. corn because of livestock feed demand and Beijing’s efforts to fight rising food prices. Brazil’s ANEC estimates 2020 corn exports at 31 million to 33 million tons, with September exports seen at 4.78 million tons, compared to 6.48 million in August and 7.3 million during August 2019. Ukraine grain trade group UGA estimates 2020 corn production at 35.3 million tons, compared to 38.9 million in August, with exports of 29 million tons, compared to last month’s guess of 33 million. Ethanol futures were unchanged. The U.S. Energy Information Administration says last week’s ethanol production averaged 922,000 barrels a day, down 9,000 on the week and 91,000 on the year, while stocks were reported at 20.882 million barrels, up 473,000 from the previous week, but down 2.919 million from this time last year.

The wheat complex was mixed. Chicago and Kansas City were lower, with the winter wheat harvest wrapped up and recent rain in the southern Plains ahead of new crop planting. Minneapolis was steady to firm, even with the spring wheat harvest expected to pick up steam in some areas. As of last Sunday, the spring wheat harvest was slower than average with quality concerns in parts of the northern U.S. Plains. Canada’s updated wheat stocks numbers are out Friday and there’s the potential for frost and freeze conditions in parts of the Canadian prairies early next week. Statistics Canada did put out a larger than expected all wheat production estimate out last week. Ukraine grain trade body UGA sees that nation’s 2020 wheat crop at 26.6 million tons, down 200,000 on the month, with exports of 17.5 million tons, a half million less than last month. DTN says Japan is tendering for 80,000 tons of feed wheat.

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