Market News

Lower dollar helps prop up soybeans, corn, wheat

Soybeans were higher on short covering and technical buying, in addition to the lower move in the dollar during the session. It was an up and down day in light trade volume ahead of the day off for Thanksgiving. China bought 110,000 tons of 2022/23 U.S. beans Wednesday morning. Still, sustained demand is a question mark because of COVID in China and the narrow window for U.S. exports this season ahead of Brazil’s harvest. The weekly U.S. sales numbers are out Friday morning. Soybean products were higher on solid demand.

Corn was higher on short covering and technical buying, along with the lower dollar. While export demand for U.S. corn is slow, demand for feed and fuel use continues to be strong. The U.S. Energy Information Administration says ethanol production last week averaged 1.041 million barrels a day, up 30,000 on the week, but down 38,000 on the year, with stocks of 22.829 million barrels, a ten-week, 1.531 million above the prior week and 2.665 million more than a year ago. Planting and development weather in South America generally favors Brazil over Argentina. The big test for Brazil though will be the second crop, which is planted after soybeans are harvested. The USDA’s next round of supply, demand, and production projections is out December 9^th, with CONAB’s updated outlook for Brazil set for December 8^th.

The wheat complex was mixed, mostly higher, rallying off the session lows with help from the dollar. There is rain and snow in the forecast for parts of the U.S. Plains, but it could miss some of the drier areas of the region. That’s expected to be an issue into spring when the crop emerges from dormancy. The fundamental outlook for U.S. wheat remains neutral to bearish, with export demand limited by relatively high U.S. prices, even as global supplies tighten. The extension of the Black Sea export agreement is fully viewed as negative for U.S. wheat demand but can definitely be viewed as a win in the effort to fight global hunger. Parts of eastern Australia are seeing harvest delays due to heavy rain, which is also impacting crop quality. There’s talk, but no confirmation, of U.S. purchases of wheat from the European Union.