Soybeans, corn down on rain in dry areas

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Soybeans, corn down on rain in dry areas

Soybeans were sharply lower on fund and technical selling, also closing the week sharply lower. The trade was watching rain in the western Midwest and Plains, which is expected to continue into the coming week. That should help in a year where beans need a solid yield to meet demand projections. A major recent crop tour had mixed results, but with a national yield above the USDA’s most recent guess. There were no soybean export sales announced Friday morning, the first business day without a reported sale since August 4th. The total for those eleven business days was 2,715,790 tons, all new crop, except for 200 tons of old crop, and all to China or unknown destinations, except for Thursday’s purchase by Mexico. U.S. beans now hold a price advantage over Brazil.  Soybean meal was up on an oversold bounce. Soybean oil was pressured by the lower move in beans and talk, but no confirmation, that the EPA will lower biofuel blending mandates.

Corn was lower on fund and technical selling, finishing the week with significant losses. Corn was also watching the weather, with generally good coverage in the forecast for some of the drier growing areas. A recent major Midwestern crop tour has yield and production above the USDA’s August report but notes rain will be needed to help the crop meet the full potential. The USDA’s next production estimate is out September 10th. Ethanol futures were steady. The trade is also watching the second crop corn harvest in Brazil. In Argentina, the Rosario Grain Exchange is expecting record large planted area for corn, coming at the expense of soybeans, with production projected at 55 million tons. Argentina is currently the biggest competitor with the U.S. for export business, following the weather issues that impacted Brazil’s second crop and pulled production well below expectations.

The wheat complex was mostly lower, with Chicago, Kansas City, and Minneapolis all sharply lower for the week. The rain was largely too late to help spring wheat but will recharge soil moisture in some areas ahead of winter wheat planting. July Minneapolis was firm, the only contract in the complex to close in the black. The trade is also watching crop weather in Canada, Argentina, Russia, Europe, and Australia. Export demand is slow, with U.S. wheat priced above most competitors, but global crop weather problems could lead to at least some improvement in demand for U.S. wheat. DTN says Japan bought 143,675 tons of food wheat from the U.S., Australia, and Canada, while Algeria purchased 290,000 tons of optional origin milling wheat and the Philippines picked up 165,000 tons of feed wheat from an unspecified source.