Soybeans, corn up on weather wariness
Soybeans were firm to higher on fund and technical buying. Contracts were mixed early, but rallied, with traders watching the weather closely during these key development phases. Most forecasts have much needed rain in some western growing areas, against drier conditions in the east. Beans will need a trend-line yield or better to meet demand projections and limit further price inflation for end users. The USDA’s next projection is scheduled for September 10th. The trade is also watching conditions ahead of planting in Brazil, with an eye on the potential La Nina pattern, which could trim yields. Producers are expected to increase planted area with widespread activity getting underway in mid-September. There were no reported soybean export sales Wednesday and the USDA’s weekly numbers are out Thursday morning. Soybean meal was lower on profit taking and the adjustment of product spreads, the latter of which supported soybean oil. Ahead of next week’s production estimates from Statistics Canada, on average, analysts expect canola production to be 14.1 million tons, compared to the 2020 total of 18.72 million tons.
Corn was modestly higher on fund and technical buying. Corn was also watching the weather and the eventual impact on yield and crop size. Corn will also need a trend-line yield or better to meet USDA’s demand expectations and not price itself above demand. U.S. corn is the best priced feed stuff on the global market, aside from corn from Argentina. Argentina’s corn crop is reportedly 95% harvested, with about 38 million tons of the projected 48-million-ton crop sold. The trade is also watching second crop harvest activity in Brazil. There’s been more talk, but no confirmation, of new demand from China, with the current U.S. marketing year wrapping up next week. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production averaged 933,000 barrels a day, the seventh week with a decline and the lowest average since March, down 40,000 on the week and only up 2,000 on the year. The supply of 21.223 million barrels was a decrease of 335,000 from the week before, but an increase of 814,000 form a year ago. Romania’s Ag Ministry estimates corn production at 13.7 million tons, compared to 10.2 million last year.
The wheat complex was mostly lower, with Chicago and Kansas City down and Minneapolis mixed. That rain in the Plains is too late to help spring wheat but will help recharge soil moisture ahead of winter wheat planting. Still, the northern and western Plains will need sustained rainfall to really make a difference, with the same factors impacting spring wheat expected to limit white winter planting. Private firms have recently issued lower production estimates for Canada, France, and Russia, all export competitors. The latest guess for France’s soft wheat crop is 34.93 million tons, up on the year, but below the 10-year average. Statistics Canada’s next set of production estimates is out next Monday, with all wheat projected at 22.6 million tons, compared to 35.183 million a year ago, including spring wheat at 15.9 million tons, well below last year’s total of 25.842 million tons due to widespread drought. Romania’s Ag Ministry says production totaled 11.4 million tons, compared to 6.4 million tons a year ago, with harvest 98.5% complete. Romania has recently played an increased role in the export market as Russia holds back some grain because of production uncertainties. The trade is also watching the potential impact of La Nina conditions on Argentina’s wheat crop, which a major Argentinian exchange says could reduce production by 20% to 30%. DTN says The Philippines is tendering for 168,000 tons of feed wheat, while Taiwan is in the market for 48,875 tons of U.S. milling wheat.