Soybeans led overnight gains and trade volume with a move to a new 2 1/2-month high, while the feed grains consolidate near lows; the overall demand outlook remains much rosier for the soy complex than corn and wheat, which are being priced out of any action on the global market.
Mexico is walking back their plan to phase out GMO corn imports just a bit; they have offered to extended the deadline until 2025 now and “make clearer” the outstanding Presidential decree on the matter, after threats from U.S. officials to counter with legal action under the US-Mexico-Canada trade pact.
Heavy rains fell south over the past 24 hours and precip is shifting up into the heart of the belt today, resulting in decent coverage for most; the Plains will see another chance early next week and extended maps look active throughout. Temps remain warm for the next ten days, back to below-normal past that.
Argentina will see chances north through Monday but remain dry past that; Brazil rains are widespread over the next five days, wet north in the 6-10 day.
Much of today’s session will be spent getting final positions in place ahead of the month World Agricultural Supply and Demand Estimates. Nearly all analysts are expecting to see a decrease in US corn, soybeans, and wheat demand. The most is expected to be seen in corn where exports are well below where we were expected to be. Soybeans and wheat are closer to current estimates but showing signs of declining demand as well. The real question is how much of a demand adjustment we may see. There are thoughts corn usage could decrease nearly 100 million bu from the current projection. While sizable, this may not have a significant impact on futures given the amount of liquidation we have already had in the complex. Soybean demand could decrease from 25 to 50 million bu, and while smaller than corn, this may have more of a price impact. It was thought the US soybean cushion would continue to decline and if stocks are rising, we will see less need for risk premium in the contract. This is especially true with a record crop out of Brazil this year. The overall stocks to use on soybeans remains near a rationing level though which will limit selling at this point.
Have a great day!