Market News

Higher USDA crop estimates send soybeans, corn lower

Soybeans were lower on commercial and technical selling. The USDA raised its production and yield estimates, which pulled U.S. ending stocks higher. Generally good U.S. harvest weather this week is expected to help some producers end the season in the next few days. Global production was up on the month, but with no changes, yet, for South America. CONAB raised its outlook for Brazil a record 162.421 million tons, 0.3% more than October and potentially 5.1% higher than last year’s record crop, citing higher acreage, while also increasing the export outlook, with both sitting above current USDA projections. That bigger estimate by CONAB is during a time of mixed planting conditions for Brazil, so the number could be lowered in the coming months. The USDA left soybean imports by China unchanged at 100 million tons. Soybean meal was mostly lower on bull spreading, while bean oil was up on lower new crop ending stocks. The USDA says China bought 1,044,000 tons of 2023/24 U.S. soybeans Thursday morning, while unknown destinations picked up 662,500 tons, also for 2023/24. That China buy was the 11^th largest daily reported sale on record, with both purchases bringing the announced weekly total to 2.852 million tons, 1.713 million of that to China, nearly triple the rumored amount. Sales last week were nearly 40 million bushels, slightly lower than average, with China and Mexico taking the top slots, but with a cancelation by unknown destinations.

Corn was lower on commercial and technical selling. The USDA sees a record large U.S. corn crop, also increasing the domestic ending stocks projection. The USDA raised feed, fuel, and export demand expectations, potentially to offset some of the bearish influence of that record large production estimate. Harvest is ongoing and should wrap up soon in some key growing areas. CONAB lowered its combined corn crop estimate for Brazil 0.3% to 119.066 million tons, which would be 9.6% lower than last year, cutting exports as well, potentially opening up some opportunities for the U.S. CONAB did lower expectations for the first and third crops, while raising second crop slightly. Still, that’s a big unknown because of the soybean planting issues in parts of Brazil. CONAB’s next update for Brazil is out December 7^th. Globally, no changes for South America this month, on either production or exports, while production and exports for Russia and Ukraine were above a month ago. The USDA says U.S. export sales last week were 40 million bushels, up sharply from the previous week and a little bit better than average, mainly to Mexico and Japan.

The wheat complex was lower on fund and technical selling. U.S. ending stocks were above a month ago due to higher imports, along with lower feed use. Globally, the USDA reduced expectations for crops in Argentina, Brazil, and India, while raising the guesses for Russia and the European Union. The Rosario Grain Exchange reduced its guess for Argentina to 13.5 million tons. Australia was unchanged by the USDA despite recent weather issues potentially impacting production. Exports were down for Argentina and up for Russia, with imports by China also above a month ago. CONAB lowered its wheat production total for Brazil while increasing import expectations. The USDA’s next set of supply and demand estimates is scheduled for December 8^th, if the federal government can avoid a shutdown. The USDA’s attaché for India now pegs wheat production at 106 million tons, compared to the official guess of 110.55 million tons. Last week’s U.S. wheat exports sales were 13 million bushels, a good improvement from the week before, but below average, reflecting the continued dominance of the market by Russia. The leading purchasers were South Korea and unknown destinations, with no reported sales to China.