Market News

Corn, soybeans, wheat start 2018 in positive territory

Soybeans were modestly higher on commercial and technical buying, managing to finish in the black after turning mixed at midday. Conditions in South America mostly look good, but parts of Argentina could see a hot, dry pattern over the next week. Brazil did receive some rain over the weekend and temperatures look less threatening, but their currency did gain ground against the dollar early Tuesday, contributing to some of the initial gains. New USDA supply and demand numbers are out on the 12th. Soybean meal and oil followed beans higher. The USDA says November’s domestic soybean crush totaled 173 million bushels, slightly less than expected and down 3 million from October, but up 2 million bushels from November 2016. Crude and refined oil production were also down on the month, up on the year. Weekly export sales numbers will be out Friday.

Corn was modestly higher on commercial and technical buying, starting 2018 very close to where it started 2017. Corn is expecting at least some increase in feed demand because of the cold conditions across much of the Midwest and Plains. Corn is also watching conditions in South America, especially the hot, dry conditions expected in parts of Argentina. Final 2017 production totals and quarterly gain stocks are also out on the 12th. After that – the trade’s watching pre-planting conditions ahead of the prospective planting numbers at the end of March. Ethanol futures were mostly firm. The USDA reports corn consumption for alcohol and other uses during November was 525 million bushels, up 1% from October. For fuel alcohol use, primarily ethanol, consumption was 476 million bushels, a 1% increase on the month and 5% rise on the year. DDG production was also up from both the last reporting month and last year. Weekly ethanol production numbers are pushed back to Thursday.

The wheat complex was modestly higher on commercial and technical buying, along with weakness in the dollar. The U.S. winter crop is dormant, but there is some talk about winterkill, with very cold conditions reaching as far south as the Southern U.S. Plains with drought or near drought conditions and little or no snow cover for much of the region. The USDA’s first official winter wheat acreage estimate of the season is also out on the 12th. Given the resiliency of wheat, it may not really be a big rallying point until spring and the fundamentals are bearish, globally as well as domestically, but there’s buying interest at these levels. Iraq and Morocco both have open wheat tenders, all or part of which could be filled by the U.S.