Soybeans up on improved export demand

Market News

Soybeans up on improved export demand

Soybeans were sharply higher on commercial and technical buying, finishing the week with solid gains. China and unknown destinations bought more U.S. beans Friday morning, the seventh business day in a row with a new sale. The purchase by unknown was 326,200 tons, with all but 200 tons for 2021/22 delivery, and China picked up 126,000 tons of new crop. That brings the running total to 1,711,200 tons, nearly all of it new crop, and all to China or unknown. Those sales to unknown might turn out to be China when it’s time for delivery. U.S. Gulf prices are below Brazil’s FOB prices at one of their major ports, which could lead to more demand for U.S. beans in the coming weeks, especially with Brazil’s exportable supplies close to exhausted. The trade is watching development weather, with rain in the forecast for some of the drier areas. Soybean meal and oil were mostly higher on commercial spread adjustments.

Corn was mixed, mostly modestly lower, still closing out the week higher. Corn consolidated after Thursday’s gains while watching the weather, needing a trend-line yield or better to meet demand. The USDA did lower the domestic production and yield estimates, with further reductions possible, depending on August weather. Still a major private Midwestern crop tour did find generally good yield results and the September 10th update will be based on objective field data, not producer surveys. The USDA cut global corn demand expectations Thursday but left China’s import guess unchanged at 26 million tons for both old and new crop. China’s domestic prices remain nearly double U.S. prices and Brazil’s smaller than expected second crop will likely lead to at least some increase in U.S. sales, but Ukraine will also be a competitor for market share. Ethanol futures were unchanged.

The wheat complex was mixed, with Chicago and Kansas City mostly higher and Minneapolis up, including a new high in the September contract and all three posted solid week to week gains. Wheat consolidated Friday and adjusted commercial spreads after the USDA lowered U.S. and world production and ending stocks Thursday. The near-term outlook remains neutral, with USDA still projecting record global production, but slashing the world supply projection to a multi-year low. Either way, the USDA did cut production outlooks for Canada and Russia, with more reductions possible as harvests move forward. The U.S. winter wheat harvest is nearly over, with the spring wheat harvest advancing due to that dry weather. The USDA’s weekly crop progress and condition numbers are out Monday at 4 Eastern/3 Central. The weather impacting U.S. spring wheat could limit white winter wheat planting in the northwestern U.S. Plains. Recent rain will help, but the region will need to see a substantial boost in precipitation.