Market News

Soybeans, corn down with wheat mostly lower

Soybeans were lower on fund and technical selling. Soybeans were down on liquidation, along with losses in products, despite the good demand, tight supplies, and bullish crush margins. Forecasts have more rain in dry parts of central and northern Brazil starting later this week. That’s in contrast to the continued excessively wet conditions in southern Brazil. Those planting delays in Brazil have pulled some private production estimates below 160 million tons. CONAB’s updated outlook for Brazil is out on the 7^th, with the USDA’s new supply, demand, and production numbers on the 8^th. China bought 136,000 tons of 2023/24 U.S. soybeans ahead of the open. China has bumped up its demand for U.S. beans, but Brazil is still shipping aggressively, causing U.S. sales to run behind the 2022/23 pace by a significant margin.

Corn was lower on profit taking and technical selling. Corn’s watching weather in South America, with Brazil’s first crop nearly planted and mostly favorable conditions in Argentina. There’s rain in the forecast for parts of Argentina, along with portions of Brazil. Ethanol margins continue to be supportive, even with lower prices for ethanol. The U.S. Energy Information Administration says ethanol production last week was a 19-week high, averaging 1.076 million barrels a day, up 65,000 on the week, but down 1,000 on the year. The Renewable Fuels Association says October’s ethanol exports were 117.1 million gallons, 3% less than September’s 18-month high, with Canada taking the top slot for the 31^st month in a row, followed by India and the United Kingdom. October DDGS exports were 896,708 tons, 13% lower than the previous month, with Mexico, Vietnam, and Canada leading the way. For the year to date, ethanol exports essentially match the 2022 pace, while DDGS exports are 4% slower than a year ago.

The wheat complex was mixed, with Chicago mostly lower and Kansas City and Minneapolis down. China bought another 372,000 tons of U.S. soft red winter, bringing the announced running total for the week to 1.01 million tons. The USDA’s weekly sales numbers are out Thursday morning. However, that purchase was not enough to pull contracts into positive territory for the third consecutive session, as the overall 2023/24 pace remains slow halfway through the marketing year, with Russia dominating global business in recent months. Shipments out of the Black Sea region have slowed down a little recently due to weather issues and Ukraine’s movement is down after the collapse of the Black Sea Grain Initiative, but it hasn’t led to an appreciable, sustained rise in demand for U.S. wheat. U.S. winter wheat is headed into dormancy in generally much better shape than last year. Still, portions of the southwestern U.S. Plains remain locked in drought, with forecasts showing mostly dry conditions in the region into mid-month. The European Union says soft wheat exports since the start of the marketing year July 1^st are 13.7 million tons, compared to 19 million this time last year.