DTN Grain Close: Soybeans Lead Markets Lower After USDA Sees Record Crop

Image from Mississippi State University

September contracts of corn, soybeans, and all three wheats tumbled lower Friday after USDA estimated a new record U.S. corn yield and a new record U.S. soybean crop. Wheat prices also fell lower in sympathy, even though USDA’s numbers were more neutral for wheat.

 

Midday: Row crops weaker in pre-report action, wheat mixed.

CORN

Corn trade is 3 to 4 cents lower in pre-report trade with trade focusing on potential yield increases. The forecast looks to continue the recent pattern in the near term keeping maturity moving right along with cooler and wetter weather to the east. Ethanol margins will likely to see mixed action with flat corn trade and the end of summer driving hours with ethanol futures sliding again this morning with trade now 9 cents off the recent levels.

Corn basis is fading ahead of harvest and late season corn movement with harvest likely to start a couple weeks early this year. On the WASDE report, trade is looking for yield at 176.3 BPA, and new crop carryout at 1.630 billion bushels, up from 1.552 last month.

On the September chart, futures have support at the 50-day at $3.64 with the upper Bollinger Band at 3.79, with the 200-day at $3.83 the next round higher.

SOYBEANS

Soybean trade is 7 to 12 cents lower with trade drifting lower ahead of the report in quiet action and little fresh news ahead of the report. Meal is 1.50 to $2.50 lower and oil is narrowly mixed.

Bean basis has started to slide ahead of harvest with the slow start to export bookings offsetting strong crush margins. Weather could provide more support if August weather ends up on the dry side with the forecast limiting rain in many areas in the near term with the second week more mixed as maturity continues ahead of normal with the east showing the most benefit. The daily wire also had 210,000 metric tons of soybeans sold to unknown.

On the WASDE report trade is looking for yield at 49.8 BPA, with new crop carryout at 641 million bushels. On the September chart trade back below the 10-day at $8.92 with the 20-day at $8.73 support.

WHEAT

Wheat trade is narrowly mixed with trade moving sideways with the sharply stronger dollar helping to limit rally attempts this morning. Spring wheat progress will pick up with the warmer weather returning this week with harvest expanding with mixed yields so far. Trade continues to worry about taxes and restrictions off of the Black Sea as harvest wraps up but the cheaper currency will help to offset in the near term.

HRW basis remains sideways to lower as the U.S. struggles to compete on the export market even with the end of European harvest amid their difficulties. Australia remains on the dry side with the crop pace ahead of normal as well. Weekly export sales remained soft at 317,100 metric tons.

On the September Kansas City chart, we are back above all the major moving averages with trade with the 10-day at 5.71, and the 20-day at 5.40 with the next resistance the contract high at 5.99.

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