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Soybeans, corn down awaiting USDA numbers
Soybeans were lower on profit taking and technical selling. China’s October soybean imports were the lowest for any month since October 2014, likely due to high prices and poor domestic crush margins. China’s General Administration of Customs says the total of 4.14 million tons was down 19% on the year, with year-to-date purchases through the end of October at 73.18 million tons, 7.4% behind the 2021 pace. Beijing says it will keep zero-COVID polices in place, likely further impacting demand. For now, demand continues to be solid, with export inspections topping 2.5 million tons, a slight improvement from last week, mainly to China and Mexico. The USDA says 94% of U.S. soybeans are harvested, compared to the five-year average of 86%. Soybean meal was mixed, mostly higher, on spread trade out of the December contract, while bean oil was lower on profit taking and the implication of slower vegetable oil demand from China. Brazil’s soybean planting is reportedly going well, with activity just getting underway in Argentina. Safras e Mercado says about 20% of Brazil’s new soybean crop has been sold, slower than average, with farmers probably waiting to see how Chinese demand looks in the coming months.
Corn was lower on profit taking and technical selling. Weather in South America continues to favor Brazil, with planting in Argentina far behind average due to drought and more talk of producers switching to soybeans. Stateside, as of Sunday, 87% of U.S. corn is harvested, compared to 76% on average. Rain in parts of the U.S. later this week might delay late harvest activity but should provide at least a short-term boost to river levels, which would aid movement. While export demand for U.S. corn is slow, domestic demand is solid. Corn export inspections fell short of 250,000 tons, down on the week and the year, primarily to Mexico and El Salvador. The USDA’s next set of supply and demand estimates and CONAB’s updated outlook for Brazil are out Wednesday, November 9th. Corn is also watching the fluid export situation in the Black Sea region.
The wheat complex was mixed, with Chicago down and Kansas City and Minneapolis up. The U.S. winter wheat crop is in historically bad shape, with drought conditions in Plains expected to worsen through the winter. According to the USDA, 92% of winter wheat is planted, compared to the usual rate of 90%, with 73% of the crop having emerged, compared to 74% typically in early November. 30% of U.S. winter wheat is rated good to excellent, up 2% on the week, but down 15% from this time last year. The trade is also watching crop quality reports in Australia and developments in the Black Sea region. Ukraine’s Ag Ministry says exports since the start of the marketing year July 1st are 14.3 million tons, 31% slower than last marketing year following Russia’s invasion. The U.N. and Turkey brokered Black Sea export corridor agreement is set to expire later this month. If there is going to be an extension, one of the concessions by the U.N. might be a withdrawal of some of the sanctions against Moscow, which have impacted Russia’s export business. Wheat export inspections were above a week ago and below a year ago, but still on pace to meet USDA projections for the current marketing year. The top destinations were the Philippines and Japan.
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