Soybeans, corn down on post-USDA report profit taking
Soybeans were lower on profit taking and technical selling, compounding the week’s losses. The USDA left U.S. ending stocks unchanged at 245 million bushels with no adjustments to the U.S. balance sheet. That’s pretty typical for December, with the USDA generally waiting until the preliminary final production totals in January to make significant adjustments to the U.S. balance sheet. The average estimates 2023/24 U.S. farm price was also unchanged, holding at $12.90 per bushel, well below the 2022/23 average of $14.20, but there are still about nine months left in the current marketing year. The production guess for Brazil was down on the month, but still a little bit above the most recent estimate from CONAB, while the USDA raised exports for Brazil 2 million tons to 99.50 million. Imports by China were revised upward by 2 million tons due to the strength of trade with Brazil. That production number for Brazil is based on the planting delays and expected changes to acreage, with potential major adjustments delayed until the weather situation during vegetative growth becomes clearer. There were no changes to production or exports for Argentina. Soybean meal and oil were lower on fund selling. Changes for soybean products were minor. The USDA did lower the average estimated farm price for soybean oil, while raising the price projection for soybean meal. China bought 136,000 tons of 2023/24 U.S. corn Friday morning for an announced weekly total of 393,000 tons.
Corn was modestly lower on profit taking and technical selling, with contracts ending the week mixed. The USDA made a bigger than expected cut to U.S. ending stocks on export expectations, but the figure remains above 2 billion bushels, and while most of the marketing year is ahead of us, that’s a psychologically significant number. In comparison, the 2022/23 marketing year ended with a carryout of 1.361 billion bushels and the U.S. is expected to produce a record corn crop this year. The average 2023/24 U.S. price is estimated at $4.85 per bushel, steady with a month ago. The USDA’s next round of supply, demand, and production numbers is out January 12th. There were no changes to South American corn production or exports. That’s largely due to the improved weather in Argentina and the second crop being the biggest crop in Brazil. The UDSA did raise production for the European Union, Russia, and Ukraine, and exports for Ukraine. Friday, unknown destinations picked up 165,000 tons of 2023/24 U.S. corn for an announced weekly total of 432,044 tons.
The wheat complex was lower on profit taking and technical selling, while still ending the week mostly higher. U.S. wheat ending stocks were lower than last month, down 25 million bushels to 659 million bushels, on a projected increase in export demand. China Friday morning purchased another 110,000 tons of 2023/24 U.S. soft red winter, pulling the weekly announced total to 1.12 million tons. Still, it remains to be seen if that demand will be sustained and those purchases could always be canceled or shipped to a different destination. The U.S. wheat shipping pace continues to be slower than last marketing year. The average 2023/24 U.S. farm price is estimated at $7.30 per bushel, $.10 higher than in November. Global changes were minimal, with higher crop estimates for Australia and Canada. The USDA increased the export projections for Australia, Canada, and Ukraine, while leaving Russian sales steady at 50 million tons. The USDA also lowered the wheat production guess for Brazil, bringing it closer to the most recent figure from CONAB, which also lowered Brazil’s domestic supply projection to a 20-year low. That could lead to more imports by Brazil, especially with Argentina’s wheat crop taking another hit from weather.