Soybeans, corn drop, watching rain
Soybeans were sharply lower on fund and technical selling. Ida will cause some harvest delays in the Delta and southeast but the system could be less disruptive to activity than originally expected. The biggest disruption is expected to be to export movement out of the Gulf. The USDA says 56% of U.S. soybeans are rated good to excellent, steady on the week, with 93% at the pod setting stage, compared to the five-year average of 92%, and 9% dropping leaves, compared to 7% on average. A nationwide survey by Allendale Inc. has this year’s U.S. soybean crop at 4.348 billion bushels, with an average yield of 50.14 bushels per acre, compared to the USDA’s August projections of 4.339 billion bushels and 50.03 bushels per acre. China bought 256,000 tons of new crop U.S. soybeans, pushing the announced sales total for August to 3,497,940 tons, almost all new crop and nearly entirely to China and unknown destinations. Those sales reported as heading to unknown could be switched to China when it’s time for delivery. Export inspections were more than what’s needed to meet projections for the current marketing year, with Mexico and Germany leading the list. Soybean meal and oil followed beans lower. The trade is monitoring pre-planting conditions in Argentina and Brazil, along with slow interior movement in Argentina and Paraguay caused by low river levels. Statistics Canada has that nation’s canola crop at 14.749 million tons, a decline of 24.3% on the year, greatly impacted by drought in some key growing areas. Still, that was above what analysts were expecting heading into the report. Soybean production in Canada is expected to be 5.823 million tons, 8.4% under a year ago.
Corn was lower on fund and technical selling. Corn is also watching the weather, including those early harvest delays, with rain in the forecast for some northern and western areas. As of Sunday, 60% of U.S. corn is in good to excellent condition, unchanged, with 91% at the dough making stage, compared to 89% normally in late August, 59% dented, compared to 55% on average, and 9% mature, compared to the typical pace of 10%. USDA supply, demand, and production numbers are out on the 10th. Corn, and soybeans, will need a trend-line yield or better to meet demand expectations and limit further price inflation for end users. The most recent survey by Allendale Inc. has the crop at 14.894 billion bushels, with an average yield of 174.57 bushels per acre, compared to the USDA’s August estimates of 14.75 billion bushels and 174.57 bushels per acre. Corn is also waiting to see what happens with export facilities in and around the Gulf region. Nearing the end of the 2020/21 marketing year, export inspections were less than what’s needed to meet USDA expectations, but the pace remains well ahead of 2019/20. The biggest destinations were Mexico and China. Ethanol futures were unchanged. Statistics Canada has that nation’s corn for grain crop at 13.677 million tons, up 0.8% from last year.
The wheat complex was lower on fund and technical selling, unable to cling onto the mostly higher start to the session. Statistics Canada slashed its production estimate for all types of wheat due to drought heavily impacting spring wheat, but the projection was slightly higher than what analysts were expecting heading into the report. Stats Canada has all wheat production at 22.948 million tons, a drop of 34.8% from 2020, but still just above the average estimate of 22.6 million tons. Spring wheat was pegged at 16.102 million tons, 39.2% lower, with winter wheat at 2.847 million tons, 2.8% higher. Also, production estimates for Ukraine have recently moved higher, helping to fill some of the potential export market share lost by Canada, Russia, and Europe. Stateside, the spring wheat harvest is 88% complete, compared to 71% on average. The trade is also monitoring conditions ahead of U.S. winter wheat planting. SovEcon lowered its 2021/22 wheat export guess for Russia to 33.9 million tons, down 3.2 million from the prior projection and, if realized, the smallest total since 2016/17. Export inspections were down on the week and the year, with Mexico and the Philippines at the top of the recipient list.