Soybeans and Soymeal Surge on China Optimism

CME GLOBEX RECAP:

December corn is up 1/2, November soybeans are up 9 1/2. December KC wheat is down 1/2, Dec Chicago wheat is down 1/2, and December MIAX Minneapolis wheat is down .0100. 

OUTSIDE MARKETS:

The Dow Jones Industrials Index closed up 238 points on Friday and Dow futures are up 104 points early Monday. November crude oil is down 43 cents per barrel. The U.S. Dollar Index is up .119 and November gold is up a huge $123.40 an ounce.

CORN:

December corn futures are slightly weaker to start the new week with a dearth of news. Over the weekend some big rains fell in parts of the Midwest and Eastern Corn Belt and are likely to delay the harvest. The government shutdown continues so there will again be a shortage of data to trade on. Going into Monday, the corn market had been higher for four consecutive days. Corn demand remains stout on both the export front and ethanol front, but the lack of USDA data has resulted in no new sales or weekly export sales reported. Weather in South America remains favorable with ongoing rain beneficial for already planted crops. Argentine corn seeding has now reached 30% complete, according to the Buenos Airies Exchange, with the most recent estimate for the Argentine crop a record large 61 million metric tons (mmt). Soybeans are higher on comments that President Trump made that we will get a trade deal with China and Treasury Secretary Bessent is slated to meet with Chinese counterparts in Maylasia this week. Funds enter the week net-short an estimated 108,000 contracts. DTN’s National Corn Index closed at $3.82 and 40 cents below the December contract.

SOYBEANS:

Soybeans and soymeal are higher early Monday while bean oil futures are lower to start. The strength in beans is coming from comments by President Trump with an optimistic tone toward getting a trade deal with China. However, the proposed meeting with China’s Xi will not occur for another 11 days. Meanwhile China still has zero new-crop bought from the U.S. September soy exports to China at zero is the first time since 2018 that has happened. Last year at this time, September exports were just shy of 2 mmt for September. Brazil’s September exports to China are up 30% this year to 10.96 mmt and Argentina’s exports at 1.17 mmt are higher with South America accounting for more than 85% of China’s September soy imports. Weather in South America is very favorable with good rains and the planting pace is ahead of average. IMEA reports major producing region Mato Grosso is already 44% planted compared to the average of 36% and last year’s 25%. On another negative note, China has experiencing negative hog margins as cash hog prices are 34% lower than a year ago. That has led to increased slaughter and the prospect of declining needs for soymeal. November beans have rallied above the 100-day average and are sitting right at the 50-day moving average. Funds are short soybeans and soymeal while being close to even on bean oil. DTN’s National Soybean Index closed at $9.46 with a soybean basis of 74 under the November futures.

WHEAT:

Wheat markets are mixed to mostly lower to start in slow trade. The MIAX Minneapolis December is hovering just above the contract low and threatening a third straight lower finish. Continuing to pressure wheat are the rising estimates of world production and supplies. The most recent is from consultancy IKAR, raising Russian wheat production to 88 mmt. In addition to that, a survey of 5 analysts pegged the Australian production at 35.7 mmt and up from last year’s 34.1-mmt crop. Even with the large world wheat supplies, U.S. export sales and inspections continue to exceed expectations. Without USDA data recently, we can only speculate. There is little else in the way of fresh news to impact wheat. The markets remain oversold, especially Minneapolis. DTN’s National HRW Index closed at $4.22 and 70 under the December futures board.

Dana Mantini can be reached at Dana.Mantini@dtn.com