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Grains, oilseeds drop on broader market losses

Soybeans were sharply lower on fund and technical selling. Beans followed the broader market, which was down on concerns over the new COVID variant and comments from the Fed chairman. The trade is also continuing to monitor conditions in South America. World vegetable oils were lower heading into the U.S. session and Australia is expected to produce a record canola crop. There’s also talk India’s rapeseed crop will be quite a bit larger than last year. Ahead of the open, unknown destinations bought 132,000 tons of 2021/22 U.S. beans. Soybean meal was mostly lower, except for December, following the rest of the complex, and bean oil dropped on the broader market and global vegetable oils. The USDA’s October soybean crush numbers are out Wednesday.

Corn was sharply lower on fund and technical selling. Corn also followed the lead of the outside markets, while watching Argentina and Brazil. Near-term conditions generally look good ahead of a drier pattern, in-line with a La Nina event. Still, parts of Argentina do need rain and there are concerns about weather in parts of southern Brazil. Adding to the bearishness is another round of uncertainties about EPA’s renewable fuels mandate. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday, along with the USDA’s month corn for ethanol use total. With U.S. harvest activity over for the season, eyes are turning to fertilizer costs and other inputs ahead of finalizing 2022 acreage plans.

The wheat complex was sharply lower on fund and technical selling, along with the outside market influence. Additionally, contracts are overbought, allowing the complex to ignore the tighter global supply and some weather concerns. Portions of the southern U.S. Plains remain dry and portions of the eastern Midwest are excessively wet. The critical condition ratings for winter wheat are when the crop emerges from dormancy, but some of the crop is in dire shape. Argentina and Australia could produce record wheat crops, but there are concerns about Australia’s crop quality following heavy rain during harvest activity. The USDA’s new supply, demand, and production numbers are out Thursday, December 9th at Noon Eastern/11 Central. Egypt bought 600,000 tons of wheat from Romania, Russia, and Ukraine, while Ethiopia is tendering for 400,000 tons of optional origin wheat.

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