Wheat up on weather concerns
Soybeans were mostly lower, adjusting old crop/new crop spreads. Beans continue to monitor planting weather in South America and harvest activity in the U.S. The USDA reports 87% of soybeans have been harvested, compared to 83% both last week and for the five-year average. AgRural says 42% of Brazil’s soybean crop is planted, up solidly on the week, but still a little bit behind average. Safras e Mercado estimates Brazil’s 2020/21 soybean crop at 133.5 million tons, an increase of 1.3 million from their last guess. According to reports, Argentina’s government expects even stronger demand for soybeans and soybean oil from China in 2021. Argentina is the world’s biggest exporter of soybean products and ships substantial amounts of soybeans to China. The USDA’s new supply, demand, and production estimates are out on the 10th. Weekly export inspections topped 2 million tons, with China and Mexico the top recipients. Soybean meal was mostly lower and bean oil was down on technical selling. A strike by crush workers in Argentina was halted early following an order by Buenos Aires to have the union and companies meet further about bonuses. The USDA says 171 million bushels of soybeans were crushed during September, generally in-line with expectations, compared to 175 million in August and 162 million for September 2019.
Corn was mostly lower, adjusting old crop/new crop spreads. Corn is also watching planting weather in South America and harvest activity in the U.S. As of Sunday, 82% of corn is harvested, compared to 72% a week ago and 69% on average. Conditions in most areas look good for harvest activity this week. Unknown destinations bought 204,000 tons of 2020/21 U.S. corn as the U.S. continues to maintain a price advantage over many key export competitors. Weekly export inspections were bullish, with China and Mexico the leading destinations. Ethanol futures were steady to firm. The USDA says 400.869 million bushels of corn were used for ethanol production during September, down 2% from August and 1% from September 2019, with DDGS production at 1,733,521 tons, a decrease of 4% on the month and 3% on the year. Mexico’s Ag Ministry says it wants to provide financing to aid an additional 8 million tons of grain production in 2020/21, 70% of that corn, 15% wheat, and 15% sorghum. Safras e Mercado estimates Brazil’s new corn crop at 116.4 million tons, up 900,000 from the prior projection.
The wheat complex was higher on speculative and technical buying, shrugging off a higher move in the dollar. Kansas City led the way as most forecasts have warm, dry near-term weather in the U.S. Plains, potentially stressing winter wheat as it heads towards dormancy. The USDA says 89% of winter wheat is planted, compared to 86% on average, and 71% has emerged, compared to 70% normally in early November. 43% of the crop is in good to excellent shape, compared to 41% last week and 57% last year. Parts of the Black Sea region saw scattered weekend rain, but it might be too late to really help in some areas, but the general health of the crops in Russia and Ukraine will also depend on potential winterkill. Harvest in Australia is just getting underway. China’s National Grain Trade Center says 2.699 million tons of wheat were sold from state reserves last week, about 68% of the offering, with the center citing the high price of corn for that strong demand. Weekly export inspections were down on the week and the year, but still remain ahead of the 2019/20 pace. The USDA says all wheat ground for flour during the third quarter of 2020 was 234.199 million bushels, up 7% from the second quarter and 1% higher than the third quarter of 2019.