Soybean futures found overnight support from hopes for progress toward ending the U.S.-China trade war, but faded late in early trade under pressure from favorable crop weather. Corn futures again drifted lower as the weight of a likely record large U.S. crop continued to pressure prices. And wheat futures came under renewed pressure from ample U.S. wheat and corn supplies. Cotton futures are slightly in quiet early trade under pressure from a stronger dollar after posting their lowest closes in 12 sessions on Tuesday.
Corn futures mostly ranged from 1 1/2 to 1 3/4 cents lower at the end of early trading, with soybean futures mostly 1/2 cent to 1 1/2 cents lower, while wheat futures mostly ranged from 2 1/4 cents to 6 1/2 cents lower. Cotton futures mostly range from 5 to 13 points lower.
Looking at other markets, U.S. crude oil futures are 8 to 15 cents higher in cautious early trade, finding support from Ukraine’s attacks on Russian refineries and the imposition of U.S. secondary tariffs on India due to its continued purchases of Russian oil. American Petroleum Institute data indicated a smaller-than-expected weekly drawdown of 974,000 barrels in U.S. crude stocks.
The dollar index is moderately higher after hitting a 3-session high overnight on support from weakness in the euro, which has fallen to a 3-week-plus low against the dollar amid political uncertainty in France, where the government faces a confidence vote. Most-active Dec. gold futures are now 20 cents higher despite pressure from the dollar’s strength.
Based on index futures trade, U.S. stock indexes are set to open slightly lower in cautious trade as investors await today’s quarterly earnings report from AI leader Nvidia, which will be released after today’s close. Asian stock indexes were mixed in Wednesday trade. Major European stock indexes are mixed in afternoon trade.
Investors this morning will be watching the Energy Information Administration’s weekly Petroleum Status report, which is expected, on avg., to show a drawdown of 1.9 mil. barrels in U.S. crude oil stocks and 1.7 mil. barrels in gasoline stocks.
Corn futures traded narrow ranges of 3 cents or less overnight, but fell to 4-session lows, with most-active Dec. futures slipping as low as $4.07 before finding some support just above their 10-day moving average. Futures were below midrange for the session at the end of early trade.
Soybean futures traded inside of their Tuesday ranges overnight, finishing early trade near midrange after fading late in the session. Most-active Nov. soybeans have nearby chart resistance at $10.54-$10.55 3/4 and $10.61 3/4-$10.62 3/4, with nearby support at $10.46 3/4 and $10.41 3/4.
Corn futures remain under seasonal pressure, with an approaching record large U.S. harvest set to push abundant supplies into the market this fall. An absence of fresh export demand news so far this week has also kept the corn market on the defensive.
Prospects for likely U.S.-China trade talks this week are supportive for soybean futures, but no major advances are likely. A U.S. govt. spokesperson said on Tuesday that senior Chinese trade negotiator Li Chenggang is expected to travel to Washington this week to meet deputy-level U.S. officials. However, there is no meeting planned between Li and U.S. Trade Rep. Jamieson Greer, the spokesperson said, and Li’s visit is not part of a formal negotiating session.
Meanwhile, mild U.S. weather is favorable for pod filling soybeans and may be boosting U.S. crop prospects. The last time the U.S. soybean crop rating was higher in late August was in 2016.
The lower and eastern Midwest is still expected to dry down over the next several days, although cool temperatures will keep that process slow. Some rain is expected in these areas next week, but it will be light and only offer a temporary reprieve from drying. Western Corn Belt precipitation should be greatest in southern Minnesota, eastern South Dakota and a few neighboring areas of Iowa, Wisconsin and northeastern Nebraska this weekend.
Soyoil futures stabilized overnight after falling on Tuesday under apparent pressure from news that the Trump administration has granted Indonesian palm oil an exemption from the 19% tariff on imports from that country that took affect on Aug. 7.
This morning’s EIA report is expected to peg U.S. ethanol production for the week ended Aug. 22 at 1.060-1.095 mil. barrels per day vs. the previous week’s 1.072 million. Aug. 22 U.S. ethanol stocks are expected to come in at 22.588-23.000 mil. barrels, vs. week-earlier stocks of 22.688 mil. barrels.
Wheat futures are again looking technically weak as HRW wheat futures have broken out to new contract lows. Most-active Dec. HRW wheat has traded as low as $5.11 3/4 and is likely headed to test support on the most-active wheat futures continuation chart at $5.00, while nearby Sep. HRW wheat futures have already traded as low as $4.86. Dec. SRW wheat futures have traded toa 4-session low, slipping below their 10-day moving avg., which provided support for the market in the previous 3 sessions.
U.S. HRW wheat production areas will receive additional rain periodically into Sunday benefiting the long-range outlook for planting and supporting late-maturing summer crops.
The world wheat export market remains largely quiet, although low prices are likely continuing to draw demand. Jordan has reportedly issued a new tender for 120,000 MT of milling wheat, one day after buying 60,000 MT. A group of buyers in Thailand has bought an estimated 60,000 MT of feed wheat in a tender that closed overnight.
Updated quality data from the farm office FranceAgriMer indicates 93% of this year’s French wheat crop had test weights of at least 76 kilograms/hectoliter vs. the 5-yr. avg. of just 52%, but only 69% of the crop had a protein content of at least 11%, vs. a 5-yr. avg. of 83%.
Livestock futures seem likely to open mostly higher on support from technically-driven buying spurred by Tuesday’s price strength. Lean hog futures may continue to find support from their discounts to cash and lower-than-expected hog marketings. Live cattle and feeder cattle futures should continue to draw support from strong Plains cash markets, with Monday’s gains of $4.68 to $5.38 in beef cutout values also a supportive factor. The CME cash feeder cattle index rose another $1.25 on Tuesday to $359.17
