Market News

Soybean meal pulls soybeans, corn higher

Soybeans were sharply higher on commercial and technical buying, helping contracts finish higher for the week. Beans followed through on Thursday’s gains, with support from products and the sale of 122,000 tons of 2021/22 U.S. beans to unknown destinations. That brought the week to date total to 548,100 tons, most of that to unknown destinations. Chinese demand for U.S. beans is still showing lingering effects from shipping delays due to damage from Hurricane Ida, in addition to the faster than average planting pace in Brazil. Brazil generally looks better, but stress is possible in southern areas, which is a sign of La Nina. Most forecasts have a hot, dry pattern for Argentina, also a sign of La Nina. The Buenos Aires Grain Exchange says 88% of Argentina’s soybean crop is currently in good to excellent condition, with production seen at 44 million tons and 46% of the crop planted. Soybean meal and oil were higher, led by bean meal on talk of tighter global supplies. Statistics Canada says 2021 canola production was 12.595 million tons, a drop of 35.4% from 2020 and the smallest crop since 2007, hit hard by drought in the prairies. Canada’s soybean crop was 6.272 million tons, a decline of 1.4%.

Corn was modestly higher on commercial and technical buying, still ending the week lower. Corn also followed through, with help from bean meal allowing corn to shrug off the losses in wheat. Those week-to-week losses were tied to the broader market concerns about the impact on demand from the new COVID variant, along with slower than anticipated export demand, despite competitive prices. Ethanol demand continues to be a bright spot as traders wait to see what the EPA does with the 2022 biofuels mandate. Ethanol futures were unchanged. South America is nominally bearish, but that will depend on the full impact of La Nina. For now, most of Brazil’s first corn crop is in good shape and an early soybean harvest would allow producers to get a jump on the critical second crop. The Buenos Aires Grain Exchange raised its planted area estimate for Argentina, now projecting production at a record 55 million tons, with 31% planted and 90% of the crop rated good to excellent. Argentina is the second biggest global exporter of corn. The U.S. is expected to see more competition from Argentina, Brazil, and Ukraine. There’s been talk, but no confirmation, that China has recently purchased corn from Ukraine. Statistics Canada says 2021 corn production was 13.984 million tons, up 3.1% on the year, with improved yields cancelling out lower harvested area.

The wheat complex was lower on profit taking and technical selling, ensuring a sharply lower weekly finish. The trade is monitoring weather ahead of winter wheat heading into dormancy along with harvest activity in Australia. That nation is expected to produce a record crop, but quality has been lowered by heavy rainfall in some eastern and southern growing areas. Harvest is also ongoing in Argentina, with the Buenos Aires Grain Exchange reporting collection is nearly at the halfway mark, with production pegged at a record 20.3 million tons. Global supplies are tighter, with the USDA’s next round of estimates out December 9^th. Statistics Canada says that nation’s wheat crop was down 38.5% on the year at 21.652 million tons, including a 38% drop for spring wheat to 16.009 million tons, which was hit hard by the same dry weather that impacted U.S. spring wheat in the northern Plains.