Will this week’s soybean sales lift the market?

In the overnight session corn fell 3/4 of a cent, soybeans dropped 2 3/4 cents and wheat increased 1 1/2 cents. The dollar pulled back one third of a percent and crude oil is trading up a dollar this morning. This morning there was a reportable sale of 280,000 metric tons of soybeans to unknown destinations for the 15/16 marketing year.

Weekly export sales were strong for soybeans which booked 505,808 metric tons, up 48 percent week over week. This beat analyst expectations which ranged from 100,000-300,000 metric tons. The market has been looking for soybean export sales to taper as Brazil harvest is over halfway complete. Major buyers this week included Indonesia, China, Germany and the Netherlands. Corn sales were on the low side of expectations this week booking 435,000 metric tons compared to expectations of 400,000-600,000 metric tons. This week’s sales were down 13 percent from the previous week and did little to help along the overall pace of exports this year. China was one of the corn buyers this week purchasing 60,800 metric tons, the most in quite some time. Wheat sales were reported at 102,000 metric tons this week down 74 percent from last week and a marketing year low for the grain. Expectations were for sales between 200,000-400,000 metric tons.

Yesterday, the EIA’s weekly ethanol production report showed an increase in output by 6,000 barrels per day bringing weekly production to 953,000 barrels per day. This is the 3rd straight week of ethanol production increases despite the lagging energy sector. Seasonally, it is normal to see an increase in ethanol production from March through June. Ethanol ending stocks were also increased this week by 497,000 barrels per day to 21.32 million barrels.

Brazil’s Agroconsult increased their soybean crop estimate to 95.8 million metric tons from 94.7 million in their previous forecast. Brazil soybean harvest is 61 percent complete which is about 4 percent behind last year. Dry conditions recently has helped move along harvest, but light precipitation over the next few days may slow the pace temporarily. Precipitation should clear by early next week to provide more opportunity for harvest.

—Cody Bills