Soybeans, corn recover some losses

Market News

Soybeans, corn recover some losses

Soybeans were higher on short covering and technical buying. Contracts bounced back from Monday’s losses, but are still expecting good rain coverage in parts of South America over the next couple of weeks. Still, the totals and coverage are uncertain and there have already been significant delays for Argentina and Brazil. AgRural says 3.4% of Brazil’s crop is planted, compared to 1.6% last week and more than 11% this time last year. Those South American delays are expected to extend China’s reliance on U.S. beans into early 2021. U.S. harvest weather looks mostly favorable for activity. As of Sunday, 61% of U.S. soybeans are harvested, compared to the five-year average of 42%, with 93% of beans dropping leaves, compared to 90% on average, and 63% of the crop called good to excellent, down 1% on the week. Soybean meal and oil followed beans higher. Data from China’s customs agency shows September soybean imports at 9.8 million tons, mostly from Brazil, bringing the 2019/20 marketing year date total to a record 98.5 million tons. China has stepped up purchases of U.S. ag goods, but most of the recent soybean and corn sales have been for delivery in late fall or winter and the U.S./China trade deficit has widened over the past few years. Weekly soybean export inspections topped 2.1 million tons. Argentina’s Federation of Oilseed Workers will reportedly start an open-ended strike Tuesday at the Rosario port over wages, impacting some crush operations, but most facilities are expected to remain open.

Corn was higher on short covering and technical buying. Corn is also watching weather in South America and U.S. harvest activity ahead of the delayed weekly numbers. The USDA says 41% of U.S. corn is harvested, compared to the usual rate of 32%, and 94% is mature, compared to 87% on average, with 61% rated good to excellent, 1% lower. For South America, the soybean planting delays are pushing back corn planting, which is especially critical for Brazil’s second crop, the larger of their crops and the source of most of their exports. Mexico bought 110,000 tons of 2020/21 U.S. corn. Just over a month into the marketing year, Mexico is the second biggest buyer of U.S. corn, following China and ahead of Colombia. Weekly export inspections were down on the week, but the 2020/21 pace continues to run ahead of 2019/20. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Thursday. France’s Ag Ministry estimates corn production at 13.5 million tons, compared to the previous guess of 14.1 million tons, but still up 6% on the year and 4% from the five-year average.

The wheat complex was mixed. The global supply fundamentals are bearish, but there are concerns about dry weather in the U.S. Plains, Argentina, and Russia. According to the USDA, 68% of winter wheat is planted, compared to 61% normally this time of year, and 41% has emerged, compared to 35% on average. While Ukraine is has received rain recently, some private analysts have lowered production outlooks and exports have slowed down as Kyiv tries to build a domestic reserve. The European Union says the E.U. and Great Britain have exported 5.73 million tons of wheat since the start of the current marketing year on July 1st, down 29% from the 2019/20 pace. France’s Ag Ministry sees soft wheat production at 29.2 million tons, compared to the prior projection of 29.5 million, 26% less than last year and 18% lower than the five-year average. Weekly U.S. export inspections were below the previous week but above a year ago. DTN says Japan is tendering for 87,710 tons of food wheat from the U.S. and Canada.