Market News

Soybeans, corn down despite more harvest delays

Soybeans were lower on fund and technical selling. Negotiations between the U.S. and China are ongoing and there’s some optimism, but phase one of the proposed deal remains unsigned even as some discussions about phase two are being reported. China reportedly bought a number of cargoes of soybeans from Brazil last week, but China was also the leading destination in the most recent USDA export inspections report. Harvest remains slower than average, with more delays expected in parts of the Midwest and Plains, along with possible impact on crop quality. Crop conditions look good in most of South America, but parts of Argentina could see a drier pattern. Nothing is official, but rumors are Argentina’s new government will have a 35% export tax on soybeans. Soybean meal and oil were lower, following beans. Higher palm oil prices could lead to higher imports of other vegetable oils by India, including soybean oil.

Corn was modestly lower on fund and technical selling. The corn harvest is also slower than normal and the probable delays include snow in some of the states that are the furthest behind, along with rainfall, followed by high winds. Those are also some of the states with the tightest supply of propane. Still, while it won’t be a bumper crop nationally, some anecdotal yields have been strong and with slow ethanol and export demand, 2019/20 should end with a relatively ample domestic supply. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Corn is also watching planting and development conditions in Argentina and Brazil. The anticipated export tax for Argentine corn is 15%. According to reports, a feed mill group in Taiwan reportedly bought 65,000 tons of corn, likely from Argentina, and South Korean millers picked up 60,000 tons of optional origin corn.

The wheat complex was mostly lower, with Chicago and Kansas City down on profit taking and Minneapolis mixed on spread adjustments. Winter wheat emergence is slower than average and the USDA’s good to excellent rating is below a year ago, but USDA projects a record world supply, limiting any significant upside. What was a expected to be a large crop in the European Union could be held in check by rain limited planted area, but there is a long way to go and medium-term forecasts are mostly drier. New USDA supply, demand, and production numbers are out December 10^th. Ethiopia has several open export tenders, the latest for 75,000 tons of milling wheat. The USDA’s weekly export sales numbers are out Friday, pushed back by Thanksgiving. Argentina’s wheat harvest is underway, but slower than normal because of rain, with trade rumors of a 15% export tax on wheat. Striking Canadian rail workers have reportedly reached a tentative agreement to end the more than weeklong stoppage on that nation’s largest railroad.