Market News

Corn, wheat see good gains

Soybeans were narrowly mixed, but with most months holding above key support points. Near-term forecasts do have a move to a drier pattern in northern and central Brazil ahead of more rain into mid-month. That recent rainfall has allowed planting to catch up in many areas and has aided replanting, but the delays earlier in the season have likely cut back on planted area. That’s on top of continued excessively wet weather in parts of southern Brazil. Some private estimates are now even calling for a crop below 150 million tons. A new estimate for Brazil from CONAB is out Thursday, with the USDA’s December supply, demand, and production numbers scheduled for Friday. Conditions are largely favorable in Argentina. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Domestic crush margins remain positive, even with a recent slow down in export demand for soybean products.

Corn was modestly higher on commercial and technical buying. Corn is watching late soybean planting in Brazil for its impact on second crop corn acreage. Second crop acreage was already expected to be down on the year but could be cut into even further by late soybean planting delays and some farmers switching to cotton. The trade is also keeping an eye on development conditions in Argentina. Export demand has improved, mostly thanks to Mexico, with U.S. corn competitively priced when compared to other global feed grains. Sales continue to lag last year’s pace, but shipments this week were solid. Ethanol margins are a continued bright spot for corn. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was higher on short covering and technical buying. China bought another 198,000 tons of U.S. 2023/24 soft red winter Tuesday morning, bringing the announced weekly total to 638,000 tons. That improved demand from China is due to a slower pace of shipments by Russia and Ukraine out of the Black Sea, crop damage in some northwestern growing areas of China, and U.S. SRW prices becoming much more competitive following a rise in Russia. U.S. winter wheat is in much better condition than a year ago in many areas, but parts of the central, southern, and southwestern U.S. Plains would benefit from more moisture ahead of dormancy. Australia’s Bureau of Ag and Research Economics and Sciences estimates 2023/24 wheat production at 25.5 million tons, up from September, but down 37% on the year due to persistently during the growing season in some areas, followed by heavy rainfall delaying harvest activity and lowering quality. There’s more talk India will reduce its import tax to facilitate imports from Russia to limit domestic price inflation.