Market News
Grains, oilseeds start week mostly lower
Soybeans were mostly lower. Soybeans are watching development weather, favoring eastern growing areas over the western part of the region. The USDA says 59% of U.S. soybeans are in good to excellent condition, down 1% on the week, with 89% of the crop blooming, compared to the five-year average of 88%, and 61% at the pod setting stage, compared to 66% on average. China bought 132,000 tons of new crop U.S. beans, the second business day in a row with a sale. Friday’s sales were to China and unknown destinations, which might turn out to be China when it’s time for delivery. Last week’s export inspections were up sharply on both the week and the year, but 2021/22 continues to trail 2020/21. The main destinations were China and Germany. According to China’s General Administration of Customs, July soybean imports were 7.88 million tons, compared to 8.67 million for July 2021, with demand limited by slower use and significantly tighter crush margins. Soybean meal futures were lower and bean oil was higher on the adjustment of product spreads.
Corn was modestly lower on fund and technical selling. Corn is watching development weather, expecting a slight week-to-week reduction in the USDA’s good to excellent rating. As of Sunday, 58% of U.S. corn is rated good to excellent, 3% below a week ago, with 90% silking, compared to the usual rate of 93%, 45% at the dough making stage, compared to 49% on average, and 6% dented, compared to the average pace of 9%. Unknown bought 120,000 tons of U.S. corn Monday morning and Italy picked up 105,000 tons, all for delivery after September 1st. Export inspections for the week ending August 4th were below the previous week and a year ago, with the overall pace behind last marketing year. The leading destinations were China and Mexico. The first shipment of corn from Ukraine since the start of Russia’s invasion needs to find a new buyer. Originally headed for Lebanon, the vessel has been refused due to the delay in delivery. Quality could also be a concern. The first shipment of corn from Brazil to China under an agreement reached earlier this month is expected to be underway later this year, sooner than expected due to China’s high domestic prices.
The wheat complex was mixed, with Chicago up, Kansas City down, and Minneapolis mostly weak. Contracts are oversold but demand is slow, with the complex watching the winter wheat harvest and spring wheat development. For winter wheat, 86% of the crop is harvested, compared to 91% normally in early August. For spring wheat, 64% of the crop is rated as good to excellent, a drop of 6%, with 9% of that crop harvested, compared to 19% on average. The USDA’s updated supply, demand, and production numbers are out Friday. Wheat export inspections last week were above the week before, but below a year ago, with Mexico and Japan topping the list. Globally, the trade continues to monitor soft wheat development in France, which is undergoing its worst drought in nearly 20 years. Dry weather, but not drought conditions, are also a concern in parts of the Canadian Prairies. More shipping vessels have reportedly left Ukraine’s Black Sea ports, but none of them, as yet contain wheat, most of which has been shipped via rail or truck. The winter wheat harvest is ongoing in both Ukraine and Russia. India is reportedly considering temporarily suspending its 40% wheat import tariff, a sign they are considering imports to bring down record domestic prices. India was initially expected to export wheat this marketing year, but that was before a heatwave slashed production projections.
