Market News
Improved export demand props up soybeans
Soybeans were higher on commercial and technical buying. China and unknown destinations both bought new crop U.S. beans, 132,000 and 130,000 tons, respectively, putting the running total over the past four business days at 797,000 tons. If the recent rumors are true, those sales to unknown will be switched to China for delivery. U.S. Gulf prices for beans are below Brazilian prices starting in September. Near-term U.S. weather forecasts are mixed, generally better in eastern areas. This upcoming set of production numbers is based on farmer surveys, while the September update is based on field counts. Beans will need a trend-line yield or better to meet demand expectations and limit further price inflation for end users. CONAB says the 2020/21 soybean crop for Brazil was a record large 135.978 million tons, up 8.9% from the 2019/20 total of 124.845 million tons. ABIOVE has the crop at 137.5 million tons. Most firms are projecting an increase in acreage for the 2021/22 crop, with new crop planting starting in September. Soybean meal was mostly lower on spread trade and profit taking, while bean oil was mostly higher on commercial spread adjustments.
Corn was modestly lower on fund and technical selling. 64% of U.S. corn is in good to excellent shape, up 2% on the week, when many had been expecting a decline. It’s early, but an ongoing crop tour is showing above year ago yields, which will be critical for corn. Mexico bought 182,880 tons of U.S. corn ahead of the open, with 152,400 tons for 2021/22 delivery and 30,480 tons for 2022/23. The 2021/22 marketing year starts September 1st, 2021, while 2022/23 kicks off September 1st, 2022. CONAB lowered its outlook for Brazil’s second crop even further, down to 60.322 million tons, a decrease of 9.9% on the month and 19.6% on the year. 58% of the crop is reportedly harvested. That follows planting delays, hot, dry weather in some areas during growth, and a few late season frost/freeze events. Brazil’s first crop is projected at 24.898 million tons, 3.1% less than in 2019/20, with the third crop at 1.430 million tons, 5.0% below the last guess and potentially 22.4% under a year ago. Total production is estimated at 86.65 million tons, compared to 93.385 million the previous month and 102.586 million for 2020. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.
The wheat complex was higher on speculative and technical buying. The trade is waiting to see what global production changes the USDA makes in Thursday’s reports. Those supply, demand, and production numbers are out at Noon Eastern/11 Central. The U.S. and Canadian production estimates are expected to be lower because of the drought issues plaguing the spring wheat crop, while Russia could also be reduced because of dry weather in some key growing areas. Still, those are expected to be offset by better production prospects in other nations. The issues impacting U.S. spring wheat could also limit white winter planting in the northwestern U.S. Plains. The U.S. spring wheat harvest is ahead of average, while the winter wheat harvest nearly over with 14 of the top 18 states at 95% to 100% complete. DTN says Morocco is tendering for 363,000 tons of wheat. CONAB estimates Brazil’s new wheat crop at 8.591 million tons, which would be up 1.3% from the July guess and 37.8% more than the old crop total.
