Soybeans down on the day, but up on the week
Soybeans were lower on profit taking and technical selling but closing well above the session lows and finishing the week sharply higher. Rain fell during the week in some of the drier parts of the Midwest and Plains, helping production outlooks, at least to some extent. Ida could cause quality concerns and early harvest delays in the Delta and southeastern areas. Ahead of the open, China bought 129,000 tons of new crop U.S. soybeans, pushing the announced running total for the month to 3,241,940 tons, nearly all of that for 2021/22 delivery and primarily to either China or unknown destinations. Those sales to unknown destinations could turn out to be China when it’s time for delivery. A major Chinese import terminal did reopen this week. U.S. soybeans continue to hold a price advantage over Brazil. Brazil is expected to increase planted area and CONAB is projecting a record crop, but that’s up to the weather. Argentina is expected to reduce acreage, mostly heading to corn, and the world’s biggest exporter of soybean products is having issues getting meal and oil to port because of low levels on the Parana River. Soybean meal was lower on profit taking, while bean oil closed mostly firm on spread trade and oversold signals.
Corn was mostly modestly higher, adjusting spreads, while posting solid weekly gains. Corn was also monitoring the weather, especially minor yield concerns in some central and eastern portions of the growing region. Corn will need a trend-line yield or better to meet demand expectations and limit further price inflation for end users. That’s also true for soybeans. U.S. corn is currently one of the best feed options on the export market. Colombia bought 150,000 tons of U.S. corn Friday morning for a two-day purchase total of 250,000 tons, all for delivery after September 1st. Argentina and Brazil are both expected to increase planted acreage, leading to more export competition. Still, that will depend on how the expected La Nina pattern this fall and winter impacts development. Ethanol futures were unchanged.
The wheat complex was mixed, with Chicago and Kansas City down and Minneapolis up, and all three pits closing higher for the week. Recent global production outlooks are mixed, generally down in the U.S., Canada, Russia, and parts of Europe, but up in Ukraine and Australia. Statistics Canada’s updated domestic production estimate is out Monday morning. Canada’s spring crop has been plagued by the same issues impacting the U.S. spring crop, with rain now delaying harvest activity and further harming quality. Nearly a quarter into the 2021/22 marketing year, U.S. export demand has been slow but is expected to improve since Australia and Ukraine can’t pick up all of the slack from production shortfalls in other nations. India could also be a factor on the global market. Argentina is a question mark because of expected lower yields due to La Nina. Argentina is a big supplier to the Mercosur trading bloc. Wheat is also watching U.S. conditions ahead of winter wheat planting. The recent rain has helped in parts of the Plains, but more will be needed. There are early expectations for a significant reduction in white winter planting in the northwestern Plains due to severe drought conditions.