Market News
Soybeans up modestly on demand expectations
Soybeans were higher on fund and technical buying. Strong demand from China is expected to continue and U.S. prices are at a big discount to Brazil. Weekly export inspections were above what’s needed to meet USDA projections for the current marketing year. The USDA says unknown destinations bought 318,000 tons of U.S. soybeans Monday and China picked up 129,000 tons, all for delivery this marketing year. Additionally, beans continued to react to last week’s supply, demand, and production revisions. The USDA says 37% of U.S. soybeans are dropping leaves, compared to the five-year average of 31%, with 63% of the crop in good to excellent shape, down 2% on the week. The current prevent plant total for U.S. soybeans is 1.451 million acres, compared to 1.223 million in the previous update. Soybean meal was mostly lower, consolidating, bean oil was up good vegetable oil demand, which also helped out beans. The NOPA’s monthly member crush for August numbers are out Tuesday, with an average estimate of 169.468 million bushels. China estimates 2020/21 soybean imports at 95.1 million tons, unchanged on the month and down slightly from the 96 million tons last marketing year. Statistics Canada estimates the 2020 canola crop at 19.393 million tons, down 0.4% from 2019, with Canada’s soybean crop at 6.137 million tons, up 1.5%.
Corn was mixed, ending the session mostly firm. Last week’s USDA numbers were bullish, including a nearly 400 million bushel cut in the production estimate, but corn was unable to get much traction until late in the session. The current running total for prevent plant acres is 6.078 million, compared to 5.375 million in August. Harvest activity is underway, mostly in southern areas of the region. As of Sunday, 60% of U.S. corn is called good to excellent, 1% lower than a week ago, with 89% of the crop dented and 41% mature, both ahead of average, and 5% harvested, matching the usual pace. Ethanol futures were unchanged as Brazil’s government says it will expand a tariff free ethanol import program with the U.S. for 90 days. Weekly export inspections were bearish. The USDA updated the sale of 140,000 tons of corn reported August 27th from unknown destinations to China, adding China also purchased 350,000 tons of U.S. corn Monday and Japan bought 106,000 tons, all for 2020/21 delivery. China’s Ministry of Agriculture estimates 2020/21 corn imports at 7 million tons, compared to the previous guess of 5 million, and the revised 2019/20 total of 7 million, which was 1 million higher than the prior projection. Domestic production is expected to be 265 million tons, a decrease of 1.8 million from August because of a recent typhoon. Ukraine’s Ag Ministry says corn imports since the start of the marketing year are 608,000 tons, compared to 1.9 million this time last year. Statistics Canada sees that nation’s corn crop at 14.029 million tons, up 4.7% on the year.
The wheat complex was mixed, with Chicago and Kansas City up and Minneapolis mostly weak. The USDA is projecting record highs for global production and supply, keeping the fundamentals neutral to bearish, but the dollar was lower during the session and export demand has been better than expected. A quarter into the marketing year, inspections are on a bullish pace. Near-term winter wheat planting conditions look good in many areas, but parts of the Plains need rain. For winter wheat, 10% is planted, compared to 8% on average. For spring wheat, 92% is harvested, compared to 94% typically in mid-September. The current prevent plant total for wheat is 1.268 million acres, compared to 1.195 million in the prior report. DTN says Saudi Arabia bought 745,000 tons of milling wheat, while Tunisia picked up 75,000 tons of durum and 25,000 tons of soft wheat, while Jordan is tendering for 120,000 tons of milling wheat. Parts of Russia and Ukraine need rain ahead of planting, while the crop in Argentina has benefitted from some recent precipitation. Statistics Canada estimates the 2020 total wheat crop at 34.145 million tons, 5.6% more than a year ago, with spring wheat at 25.162 million tons, down 2%, durum at 6.134 million tons, up 23.2%, and winter wheat at 2.849 million tons, 67.5% higher.