Soybean Futures Fall on Chinese Demand Speculation — Daily Grain Highlights

By Kirk Maltais

--Soybeans for November delivery fell 2% to $9.97 1/4 a bushel on the Chicago Board of Trade on Tuesday, in reaction to data suggesting that China may have less demand for U.S. soybeans going forward.

--Corn for December delivery fell 0.8% to $4.04 a bushel.

--Wheat for December delivery rose 0.9% to $5.73 1/2 a bushel.

HIGHLIGHTS

Hill of Beans: CBOT soybeans fell today in reaction to new export data out of China. "The market is under pressure overnight following better than expected crop ratings and customs data out of China that said they bought more beans than expected, which reduces the potential for future sales to China," said Doug Bergman of RCM Alternatives in a note. The USDA has announced a number of flash sales of soybeans to China in recent weeks, but no new sale was reported today.

Can't Stop Progress: Yesterday's Crop Progress report from the USDA provided many traders with justification to liquidate futures positions ahead of Thursday's WASDE report -- which is expected to show larger production for U.S. corn and soybeans. "Position adjustments continue before the USDA report," Argus said in a note. The Crop Progress report is a key factor underpinning this move, with the report showing that harvests are on track, and crop conditions are mostly stable entering the bulk of the harvesting season.

INSIGHT

In the Fields: U.S. farmers have begun to harvest their fields, with the USDA reporting Monday that 5% of the U.S. corn crop has been harvested, which is ahead of the 5-year average pace. The start is placing limits on how much adverse weather ahead in the U.S. may affect the health of grain crops, if at all. "Weather is less of a factor as much of the soybean crop has set its pods already and much of the corn is black layered," said Brian Hoops of Midwest Market Solutions. "The early yields are tremendous so far and Thursday's report could hold bearish surprises as this report will be from actual yield data from test plots instead of survey based."

Cooling Down: Both daily production and stockpiles of ethanol barrels in the U.S. are expected to decline in the coming weeks, as producers adapt to the end of the summer driving season by easing output. "Ethanol production and storage will start to slide as turnaround season approaches and gasoline prices slide to multi-year lows," Robert Yawger of Mizuho Securities USA said. However, ethanol production may have consumed more corn than the USDA had anticipated -- with traders and analysts forecasting that Thursday's WASDE report from the USDA will show an increase in the amount of corn bushels used to manufacture ethanol domestically, and potentially a drop in ending stocks for the 2024/25 marketing year.

AHEAD

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The USDA will release its monthly World Agriculture Supply and Demand Estimates report at noon ET Thursday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

September 10, 2024 15:10 ET (19:10 GMT)

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