Fund selling sends soybeans, corn, wheat lower
Soybeans were lower on fund and technical selling. Export sales were down on the week, but still solid, mainly to China, even with the uncertainties about sustained demand due to Beijing’s zero-COVID policy. The USDA did report a significant cancellation by unknown destinations, but most of that was switched to China for delivery. China, Mexico, and unknown destinations all had announced purchases of U.S. soybeans this week, which will show up in next week’s USDA report. COFCO projects China’s 2022 soybean crush at 94 million tons, compared to 91 million for 2021. South American planting is ongoing, better in Brazil than Argentina, with the U.S. harvest nearly over in many key growing areas. Parts of the region are expected to see at least some delay into this weekend, with sharply colder temperatures, but it’s a relatively small part of the crop. Soybean meal was lower on commercial selling, while bean oil was mixed on bull spreading. Commodity markets and most USDA offices are closed Friday for Veterans Day.
Corn was lower on fund and technical selling. It was another bearish week for export sales, only just over 260,000 tons, and while Mexico led the way, it’s likely going to ban GMO corn imports in 2024, which would be a big hit to U.S. trade. Mexico did buy 209,931 tons of 2022/23 U.S. corn Thursday morning, bringing the announced sales total for the week to 548,531 tons. A lot of that slowness can be tied to relative strength in the dollar, which pushes U.S. prices out of the acceptable range for some buyers. However, while exports are slow, feed and fuel use remain strong. Weather in South America continues to generally favor central and norther Brazil over southern Brazil and Argentina. Corn planting in Argentina is reportedly 25% complete, significantly slower than normal due to drought and frost in some areas. The USDA’s next round of supply, demand, and production estimates is out December 9th.
The wheat complex was lower on fund and technical selling. The trade continued to monitor the Black Sea situation ahead of the grain export agreement expiring later this month. Moscow is asking for significant concessions in the ongoing negotiations and reportedly resuming its slowdown of inspections of Ukrainian vessels attempting to leave the Black Sea. For its part, Kyiv wants the deal extended for a year and to have a greater number of ports available for shipping. U.S. and world wheat supplies have tightened, but demand for U.S. wheat continues to be slow. “Unknown destinations” was the big buyer last week, just ahead of South Korea. Drought continues to plague Argentina’s wheat crop. On the heels of the lower USDA estimate Wednesday, the Buenos Aires Grain Exchange lowered its outlook to 12.4 million tons and the Rosario Grain Exchange cut its projection to 11.8 million, both below that most recent USDA guess. The trade is also monitoring quality concerns in Australia. France’s AgriMer now has soft wheat exports outside of the European Union at 10 million tons and inside the bloc at 6.94 million, both slightly less than last month.