Market News

Nearby soybeans close in the teens

Soybeans were higher on commercial and technical buying, rallying after a lower start to the session, with the January and March contracts closing above $13. The grain worker strike in Argentina has ended, but the full resumption of trade could take some time. At least 160 boats will need to be loaded with those delayed commodities and producers might continue to hold back beans because of concerns about conditions and Buenos Aires’ export tax. Most near-term weather forecasts have good rainfall in much of South America, but with longer-term uncertainties because of the La Nina pattern. Global reliance on U.S. beans, especially Chinese reliance on U.S. beans, is expected to continue because of the planting delays in Argentina and Brazil and condition woes in parts of the region. The USDA’s weekly export sales numbers are out Thursday, but probably won’t be too eye-popping since last week did contain Christmas. Soybean meal and oil were also supported by demand expectations.

Corn was higher on commercial and technical buying, notching another round of contract highs. Argentina’s Ag Ministry says it is suspending corn exports until at least March 2021 to ensure adequate domestic supplies. The ministry could decide to either shorten or extend the suspension depending on supply and demand factors, but the crop is in generally poor shape and large swaths of growing areas have seen much lower than normal rainfall totals during planting and early development. Brazil’s second corn crop won’t be available for months because of the soybean planting delays. Those factors and the U.S. price advantage should extend global reliance on U.S. corn for months. The USDA’s next set of supply and demand estimates is out January 12^th, along with the final 2020 U.S. corn and soybean production totals and quarterly grain stocks. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 934,000 barrels a day, down 42,000 on the week and 132,000 on the year, while stocks climbed to a more than six-month high at 23.504 million barrels, an increase of 335,000 from the previous week and a jump of 2.47 million from last year.

The wheat complex was sharply higher on commercial and technical buying, along with lower trade in the U.S. dollar. The U.S. supply is the tightest in years, while the global supply outlook remains neutral to bearish. That supply bearishness could lessen though because of concerns about crops in Russia and Ukraine. Still, that could be at least somewhat offset by better conditions in parts of the European Union and bigger crops in Australia and Canada. Most U.S. winter wheat growing areas have seen beneficial recent precipitation, but longer-term outlooks are uncertain. Conditions coming out of dormancy have a larger impact than conditions going into dormancy. The USDA’s winter wheat planted area numbers are out January 12^th and monthly state crop condition updates will be ongoing until the USDA’s weekly numbers resume in April. Markets are closed Friday for New Year’s Day.