Soybeans traded higher in the overnight on light news and concerns that if dryness persists in parts of the Midwest, soybeans setting pods late could be effected.
The grains are mixed this morning with corn trading 3 cents higher, wheat 3 ¾ cents lower and August soybeans 12 cents higher this morning. The August soybean contract is trading at $12.24 ½ and has first notice on Thursday, July 31. Currently, the spread between August and September Soybeans is 96 ½ cents, down from over $1.40 at the beginning of July.
Over the weekend rains were scattered, but there are still areas of dryness in the western parts of the Grain Belt. This morning, the 6 to 10 day forecast is showing a drier than normal trend throughout most of the grain belt, but 8 to 14 day forecast looks to bring in more precipitation in the eastern and southern parts of the Corn Belt. Dryness in some parts of the Midwest has been a concern, but the lack of heat stress has limited its damaging effects.
Europe’s wheat harvest has been interrupted again by more precipitation helping perpetuate the quality concerns for this year’s wheat crop. Currently there is a large gap of up to $40 a ton depending on the quality of the wheat. In Germany, the showers should delay harvest only temporarily as hot weather allows producers to get back into the field following the rain event.
Australia which is currently struggling with dryness looks to see another three months without much relief. The Bureau of Meteorology said Thursday that dry weather is likely to persist across eastern Australia for the next three months. There’s around 60% chance of below median rainfall in northern Queensland, Southern New South Wales and most of Victoria. If these forecasts were to actualize, we would see a drag on yield from the world’s third largest wheat exporter.
Soybeans had a volatile day in Chicago as the trade moved higher overnight but sold off during the day session. Export sales were massive for the new crop and today we discuss fundamentals and technicals of this market.
A string of three reportable soymeal and soyoil sales were reported this morning.
The grain markets moved a couple cents higher in the overnight after trading down for the better part of yesterday. September corn is up 1 ¼ cents. September wheat is up 4 ½ cents and august soybeans is up 14 cents on the day. Crop conditions were released yesterday after the market closed, showing small changes week over week. Corn conditions were left unchanged at 76% good to excellent, while soybean conditions improved a percent, now rated 73% good to excellent. Progress is moving along nicely, with 56% of corn now silking and 19% of soybeans setting pods. The next several weeks will be critical for final yield and the forecast for pollination is looking very favorable. The 6-to-10-day forecast from Planalytics shows above average precipitation and below average temperatures for the U.S. grain belt.
A string of export sales were reported this morning with exporters selling 225,000 metric tons of U.S new crop soymeal to unknown destinations, 180,000 metric tons of U.S new crop soymeal to Vietnam and 20,000 metric tons of U.S. new crop Soyoil to unknown destinations.
Also on the demand front, Taiwain flour millers association has released a tender overnight to purchase 80,900 tonnes of milling wheat from the United States. The tender will close on Friday, July 25, and will give a better idea of demand following a three month price decline. Japan’s Ministry of Agriculture also issued a tender to buy 94,586 metric tons of food-quality wheat from the United States, Canada and Australia. The tender should close Thursday.
Yesterday, new crop soybeans were able to hold the key support level of $10.65 after twice attempting to penetrate that price level. However, November soybeans were able to rally 6 cents off their lows to close out the day, giving hope that we have found a short-term bottom. Today it will be important to watch the $10.65 price level again since another test of that level will likely yield lower prices.
This morning there was talk out of Argentina that grain shipments out of the port of Rosario started up again on Monday after several unions’ suspended strikes. The unions will continue to hold talks with the companies, but at least for now it seems that grain will once again be moving out of the country. We have seen these strikes end only to start back up again last week so we will keep a close watch on any further developments out of Argentina. The strikes out of Argentina have been a supporting factor for old crop U.S soybeans.
Corn, soybeans and wheat all moved lower in the overnight session as near ideal conditions during pollination weigh on prices.
This morning all the grains are trading lower as ideal weather during pollination weighs heavily on the market. September corn is trading down 6 cents, September wheat is down 3 ¾ cents and August soybeans is trading 4 ¾ cents lower.
This afternoon’s crop progress report should show unchanged conditions ratings and nearly 50% of the corn and soybean crop entering the reproductive phases. Weather looks to remain very favorable for the remainder of the week with NOAA and private analysts both expecting cool temperatures across much of the grain belt. Showers should be light and intermixed, continuing to support soil moisture.
The longer term outlook remains favorable, with the 8-to-14-day forecast from Planalytics projecting below average temperatures and above average precipitation for the majority of the grain belt. This is confirmation of NOAA’s projections from last week for a cool, wet, August for the U.S. Grain Belt.
New crop soybeans are now 6 cents away from the low printed at $10.65 per bushel following the last USDA supply and demand report. Since then new crop soybeans rallied to $11.18 ¾ last Thursday, helped to its high on Thursday by the Malaysian airlines incident over eastern Ukraine. The geopolitical event was used as a selling opportunity after the initial reaction sent soybean prices higher. Keep a close watch on new crop soybeans around $10.65 which should act as a strong support level during today’s trade.
Over the weekend France and Germany both received precipitation that stopped fieldwork during harvest. The moisture throughout Europe during harvest has caused quality concerns for the wheat in that region. This is has been an ongoing story this year for European wheat and the U.S markets are unlikely to respond to it in any kind of meaningful way.
On the demand side this morning we have a few wheat tenders across the news wires that shouldn't affect the overall direction of the trade here this morning. Turkey’s state grain agency issued an international tender to import 165,000 metric tons of milling wheat and 65,000 metric tons of animal feed barley. Also, private Egyptian buyers were in the market purchasing 60,000 metric tons of wheat from the Black Sea region.
Futures traded lower in Chicago as the Ukraine premium from yesterday was sold into for corn and wheat. Old crop soybeans got a bump as news came across the wires that Argentinian strikes were back on. Join us on GrainTV to discuss these and other factors
Export sales report was strong for corn and old crop soybeans, but a sale for new crop soybeans may help lift soybeans for the second straight day.
The grains shed a couple pennies in the overnight session with old crop corn down 2 cents, Chicago wheat down 1 cent, and august soybeans down ¾ of a cent. Expectations at the office here are for a continuation of yesterday’s bounce, but we are concerned that the upside potential will be limited as strong selling pressure will likely meet any sharp rally. A strong new crop soybean sale to china should also help support the market this morning.
Corn had great export sales this week beating expectations for both old and new crop. Old crop sales came in at 573,700 MT which was well over expectations of 250,000 to 350,000. Old crop corn still ahead of pace to meet USDA expectations by about 43 million bushels.
Soybeans met analyst expectations for both old and new crop. Old crop sales were small, but at least they were positive which kept soybean sales well ahead of pace to meet analyst expectations. This week's 37,700 MT pushed old crop sales now 38.7 million bushels ahead of existing export projections which indicates that net cancellations must occur between now and Aug. 31 to meet USDA projections. New crop sales were slightly lower than expected with only 495,000 MT booked, compared to expectations between 500,000-700,000 MT. However, a reportable sale announced this morning of 708,000 MT of U.S soybeans to China should help lift the market. Wheat sales missed expectations to the low side only booking 320,700 MT compared to expectations of 400,000-550,000 MT.
The European Union will begin taxing corn imports at a rate of $7.2 per metric ton. This was announced following U.S. export prices at the gulf moving below levels required by the European commission. Imports of corn have not been taxed since August 2010 and this is viewed as negative news for U.S. corn prices.
Port worker strikes in Argentina continued on Thursday. The key export facility of Rosario has come to a standstill as port workers and grain inspectors are demanding higher wages. Argentina is a major exporter of soymeal and soyoil, and the strike has worked to underpin the soy complex in the last two days.
Exports sales combined with oversold technical conditions helped to produce a snapback for corn, soybeans, and wheat today. We discuss the export sales, Argentina news, and ethanol production on today's GrainTV.