Market News

South American weather concerns support soybeans, corn

Soybeans were higher on commercial and technical buying. Argentina’s state weather forecaster updated longer term outlooks, which are now drier in some key growing areas, with a chance for warmer than normal temperatures. China bought 426,000 tons of 2016/17 U.S. beans. The outside markets were also nominally supportive, with the dollar down, crude oil higher, and the Dow Jones Industrial Average notching new all-time intraday and closing highs. Soybean meal was higher, following beans, and bean oil was weak on profit taking. ABIOVE projects Brazil’s 2016/17 soybean crop at 101.4 million tons with exports at 57.5 million tons, both up from the September estimates. ABIOVE lowered 2015/16 production and yield numbers.

Corn was higher on commercial and technical buying. Corn’s also watching those generally drier and potentially warmer weather forecasts for parts of Argentina. The USDA’s updated supply and demand numbers are out Friday. The most closely watched areas for corn should be ethanol and exports. Ethanol futures were steady to mostly higher. According to Allendale, China wants to double domestic ethanol production by 2020 and raise consumption from 12% to 15%.

The wheat complex was mixed. Chicago followed corn, but the world wheat supply is ample, limiting the market’s long term upside. Kansas City was narrowly mixed, consolidating, and Minneapolis was lower on profit taking. The trade’s got an eye on drought conditions in U.S. hard and soft red winter growing areas. Australia’s ABARE raised its 2016/17 wheat production estimate to 32.61 million tons, up more than 4 million from the September guess and, if realized, a new all-time high. Australia is the world’s fourth largest wheat exporter. Tunisia bought 119,000 tons of food wheat from Argentina and Russia.