Big gains in corn, soybeans, wheat after USDA numbers
Soybeans were sharply higher on commercial and technical buying, pulling the most active months back above $10 per bushel. The USDA says September 1st soybean stocks were just over 523 million bushels, a bigger than expected drop of 42% on the year, reflecting the solid export demand and with an extra boost from a lower 2019 production total. That’s also effectively the 2019/20 U.S. soybean ending stocks total, but further revisions are probable. Unknown destinations bought 215,000 tons of 2020/21 U.S. beans. The USDA’s weekly export numbers are out Thursday. The trade is also monitoring U.S. harvest weather and planting conditions in Argentina and Brazil. Soybean meal was sharply higher on the strength in beans, with oil following the lead. The U.S. has reported banned imports of Malaysian palm oil from FGV Holdings, the biggest global crude oil producer, following an investigation into forced labor by U.S. Customs and Border Protection.
Corn was sharply higher on commercial and technical buying. Quarterly corn stocks were smaller than expected at less 2 billion bushels, even with an upward revision for the 2019 crop. Implied fourth quarter 2019/20 demand was better than the last quarter of 2018/19, largely thanks to export demand and despite the decline in corn for ethanol use. The U.S. Energy Information Administration says ethanol production last week averaged 881,000 barrels a day, down 25,000 on the week and 77,000 on the year, while stocks fell 306,000 barrels from the previous week and 3.528 million from last year at 19.691 million, the tightest domestic supply since the end of 2016. U.S. harvest weather generally looks conducive to activity. Ethanol futures were higher.
The wheat complex was sharply higher on commercial and technical buying. Quarterly wheat stocks and the all-wheat production estimate were close to but a little bit lower than pre-report projections. The trade is also watching dry winter wheat planting conditions in the U.S., Europe, and the Black Sea region. Ukraine’s winter grain planting is reportedly the slowest in years because of that dry weather. Russia’s Ag Ministry estimates 2020 grain production at more than 125 million tons, including 82 million tons of wheat, compared to 121.2 million tons of grain including 74.5 million tons of wheat in 2019. The USDA’s next set of supply and demand estimates is out October 9th. DTN says Japan bought 5,375 tons of feed wheat from an unknown origin, while Turkey is tendering for 135,000 tons of wheat and Jordan is in the market for 120,000 tons of milling wheat.