Market News
Soybeans, corn, wheat see profit taking
Soybeans were modestly lower on profit taking and technical selling, unable to follow through on early gains. The trade is continuing to watch the planting delays in Argentina and Brazil. Much of South America is dry, but parts of the region are expected to get some rain. For now, CONAB is still projecting a record soybean crop for Brazil in 2020/21 at 133.7 million tons on an increase in planted area, with exports of 85 million tons. Just 1.6% of the crop is planted, compared to 3.1% a year ago and the five-year average of 4.5%. China bought 374,000 tons of U.S. beans, Mexico picked up 152,404 tons, and unknown destinations purchased 132,000 tons, all for 2020/21 delivery, and the weekly numbers were bullish. Soybean meal was down on profit taking and bean oil was mostly weak on spread adjustments. Estimates ahead of Friday’s supply and demand estimates generally show slight reductions for U.S. production and yield, along with a cut in ending stocks. The trade will also be watching the global numbers closely. The European Commission has approved a GE herbicide tolerant soybean variety for import.
Corn was modestly lower on profit taking and technical selling, also not holding onto the session’s higher start. The USDA’s supply, demand, and production reports out Friday are expected to show reductions in crop, yield, and ending stocks estimates. Those numbers are out at Noon Eastern/11 AM Central. The trade is also watching the path of Hurricane Delta. Weekly export numbers were neutral to bullish. Sales were solid, Japan and Mexico led the way, but shipments were less than what’s needed to meet USDA projections for the 2020/21 marketing year. CONAB estimates Brazil’s 2020/21 corn crop at a combined 105.2 million tons, up 2.6% on the year and a new record high, but planting of the second crop, the larger crop and source of most of their exports, will depend on when the soybean crop gets harvested. CONAB sees exports at 34.5 million tons, with September shipments of 6.6 million tons, up 2.6% on the year. ProAgro estimates Ukraine’s 2020 corn crop at 31.74 million tons, compared to the September guess of 34.02 million, pulling total grain production down to 69.44 million tons. The USDA’s attaché in China estimates 2020/21 corn production at 250 million tons, down 4% from 2019/20 because of fall armyworm, lower planted area, and weather damage ahead of harvest. Beijing has reportedly nearly exhausted temporary stocks via state auctions in efforts to limit price inflation. The office says China has reportedly increased its’ TRQ corn import level. Ethanol futures were higher.
The wheat complex was lower on profit taking and technical selling, peeling back from the recent highs. The complex gave back some recent gains, while watching planting delays in the Black Sea region and dry weather in the U.S. Plains. Most of the spotlight for wheat in the supply and demand estimates will fall on the global side of the ledger, but most analysts do expect month to month reductions in U.S. and world ending stocks. Russia’s Ag Ministry is projecting exportable grain for the 2020/21 marketing year at 50 million tons, up 5 million from their last guess, but with the probability of an export quota from January to June of 2021. Weekly export numbers were solid with sales ahead of last year’s pace and another good week for physical shipments. Argentina is the first nation to commercially approve a GMO wheat variety. The variety won’t be marketed until it’s approved by Brazil, the biggest market for Argentine wheat. The USDA’s attaché for China estimates 2020/21 wheat production at 134 million tons, less than the current official guess, with consumption at 128 million tons, up 1 million from the prior report because of feed mills adding wheat to rations as a replacement for higher priced corn. Overall feed consumption is expected to rise 3.2% from 2019/20.
