Soybeans continue oversold bounce
December 5, 2019 By John Perkins Filed Under: Closing Futures / Livestock Briefs, Crops Markets, Market News
higher on short covering and technical buying. Contracts remain oversold and
while weekly export numbers were neutral, unknown destinations did buy 245,000
tons of U.S. beans Thursday morning. 120,000 tons is for 2019/20 delivery and
125,000 tons is for 2020/21. There’s still some optimism about China, but also
a lot of uncertainties. The world’s two largest economies reportedly remain at
odds over U.S. resistance to rolling back tariffs and the size of China’s
purchases of U.S. ag goods. China did buy U.S. beans last week, but much less
than in previous weeks with tariff waivers either exhausted or close to it. New
U.S. tariffs are scheduled to go into effect December 15th. IEG
Vantage, formerly Informa Economics, estimates Argentina’s 2019/20 soybean crop
at 52.5 million tons and sees Brazilian production at 124.5 million tons. Soybean
meal was higher on reports of financial stress for Argentina’s top soybean
product exporter, which also supported bean oil, along with a surge in palm oil
Corn was modestly lower on fund and technical selling. Weekly export sales were
towards the low end of expectations and continue to trail last marketing year
by a wide margin, with a lot of competition from South America and Ukraine, even
as prices decline. Harvest conditions either look good or are expected to improve
in many areas ahead of another round of cold weather. The trade is also
watching weather in South America. Conditions look good for most of Brazil and while
Argentina is expected to be dry over the next several days, most forecasts have
a wetter pattern after that. IEG Vantage has Argentina’s 2019/20 corn crop at
46 million tons with Brazil at 103 million. Ethanol futures were firm. The Renewable
Fuels Association says October ethanol exports were 112.8 million gallons, up
13% on the month, mainly to India, while imports of sugar cane ethanol from
Brazil were 21.9 million gallons and DDG sales were an eight-month low at
The wheat complex was mixed with Chicago and Kansas City down and Minneapolis mostly
weak. Weekly wheat exports were the second lowest this marketing year, down
sharply with plenty of competition and the USDA projecting a record world
supply. Losses in some key exporters have mostly been canceled out by larger
crops in other competing nations. New supply, demand, and production estimates
are out Tuesday, December 10th. Dry weather in parts of the Plains
could be an issue for winter wheat, but that supply projection will likely keep
that from being a big bullish factor, unless it slashes production more than
expected. DTN says Japan bought 160,640 tons of feed food wheat from the U.S.
and Canada and Algeria purchased 500,000 tons of milling wheat from an unknown origin.
Statistics Canada will publish updated wheat production estimates Friday.
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