Market News
Soybeans down, corn mixed after USDA numbers
Soybeans were sharply lower on commercial and technical selling. Quarterly stocks were down on the year, but above expectations, with slower than a year ago fourth quarter usage. That as-of-September 1st figure essentially serves as the initial carryover guess. The USDA also made an upward revision to the 2020 production total. This year’s harvest is ongoing, with near-term rain delays expected in parts of the Midwest and Plains into early next week. That’s expected to be followed by a drier pattern. The trade is also keeping an eye on the early planting paces in Argentina and Brazil, with the probable La Nina pattern likely trimming yield prospects. Weekly U.S. soybean export sales topped a million tons, with China and Egypt leading the way and a cancellation by unknown destinations. 2020/21 soybean product sales were both up on the week, with the 2021/22 marketing year for bean and meal starting October 1st. Soybean meal dropped on commercial selling ahead of the new marketing year, while bean oil rose on the strength in global vegetable oils, including record highs for Malaysian palm oil.
Corn was mixed, adjusting spreads and consolidating after an up and down day. Quarterly corn stocks were also down on the year, but larger than expected with slower fourth quarter 2020/21 demand cancelling out a cut in 2020 production. The USDA’s next set of supply, demand, and production estimates is out October 12th. The trade continues to watch harvest activity, expecting near-term delays in some key U.S. growing areas. Corn export sales were down slightly on the week, with Guatemala and Mexico topping the list, and with a significant cancellation by unknown destinations. Those numbers could improve as the Louisiana Gulf continues to come back online. Rain in Argentina and Brazil continues to be scattered. CONAB’s first new crop production estimates of the season for Brazil are out October 7th. Ethanol futures were unchanged. South Africa’s government has corn production at 16.21 million tons, compared to 15.3 million in 2020.
The wheat complex was higher on commercial and technical buying. The USDA made a larger than expected reduction to the wheat production estimate following drought in some key growing areas. Chicago and Kansas City outgained Minneapolis following a greater reduction for winter wheat than spring wheat. Quarterly wheat stocks were also below most pre-report estimates. Rain is in the forecast for parts of the hard red winter wheat region and soft red winter conditions are generally good, but the white winter region will need more rain. The trade is also watching planting and development around the world, including Argentina, Australia, Europe, Russia, and Ukraine. Wheat export sales were lower than average, Japan and Taiwan were the big buyers, but purchased less than what unknown destinations canceled on. Just over a quarter into the marketing year, 2021/22 sales trail 2020/21. DTN says Tunisia is tendering for 125,000 tons of wheat.
