Soybeans see another round of demand support

Market News

Soybeans see another round of demand support

Soybeans were sharply higher on commercial and technical buying, pulling the most active months back above $10 with a new contract high in November. China bought 327,000 tons of 2020/21 U.S. beans Wednesday morning, bringing the announced total over the previous nine business days to 3.519 million tons, all to either China or unknown destinations. Those sales to unknown will likely end up being delivered to China, but there are some uncertainties about when or even if those beans will be delivered. The USDA’s weekly numbers are out Thursday at 8:30 AM Eastern/7:30 Central. Near-term weather looks non-threatening for most of the region, but there are concerns about the impact of Hurricane Sally in southeastern growing areas and a potential frost freeze event in some northern portions. Soybean meal and oil were supported by demand expectations. The trade is also watching early planting activity in Brazil. A survey by a crop magazine has 2021 U.S. soybean planting at nearly 88 million acres.

Corn was modestly higher on short covering and technical buying, keeping contracts near the multi-month highs. Corn is also watching demand signals, along with early harvest weather and yield results, with the next set of supply, demand, and production estimates out October 9th. Part of that demand is the recent spike in export purchases by China and unknown destinations, which have already surpassed the USDA’s current mark for the 2020/21 marketing year. Still, those sales will actually need to be delivered. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 926,000 barrels a day, down 14,000 on the week and 77,000 on the year, with the supply at 19.798 million barrels, a decline of 195,000 from the previous week and 3.44 million from last year. U.S. ethanol imports were 10.58 million gallons, the sixth out of eight weeks with reported imports. According to survey results from a crop magazine, 2021 corn acreage could be down fractionally from 2020.

The wheat complex was higher on short covering and technical buying. Export demand has been better than expected just over a quarter into the marketing year and the dollar was down during the session, aiding competitiveness. Winter wheat planting is just ahead of average and the spring wheat harvest should wrap up soon. According to APK-Inform, Ukraine is currently experiencing widespread drought, calling planting conditions the worst in a decade. The trade is also continuing to monitor harvest, development, or planting conditions in Argentina, Australia, Canada, and Russia. DTN says Ethiopia has issued tenders for 600,000 tons of milling wheat and Egypt is in the market for an unspecified amount of wheat, while Japan is tendering for 104,870 tons of food wheat from the U.S., Australia, and Canada and South Korea is looking for 38,000 tons of milling wheat from either the U.S. or Canada. A survey by a crop magazine shows a modest year to year increase for U.S. winter wheat planted area against a slightly larger decline for domestic spring wheat sowings.