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Soybeans, corn end 2020 with new highs

Soybeans were higher on commercial and technical buying, ending a sharply higher week with new contract highs and the highest close for a spot month in years. Weekly export sales were solid for a holiday week, especially for new crop, and Chinese domestic prices ended the year at new highs heading into the last U.S. session of 2020. Markets are closed Friday, reopening with overnight trade Sunday into Monday. Most forecasts have more mixed weather in Argentina and Brazil. Rain coverage is generally expected to be better in Brazil, but it could still miss some of the drier areas, and while Argentina should see at least some rain, most of the nation will continue to experience a net drying effect. Additionally, there are long-term uncertainties because of the La Nina pattern. The USDA’s next look at South American production will be in the supply and demand update out January 12th. Soybean meal was mixed on commercial spread adjustments and soybean oil was up on commercial demand. Soybean meal export sales were a marketing year low, while bean oil sales were roughly triple the previous week.

Corn was higher on commercial and technical buying, moving sharply higher for the week and establishing new contract highs to end 2020. Corn was also watching weather in South America and Chinese price activity with a solid week for the U.S. export sales numbers. Unknown destinations was the biggest buyer last week and that could turn out to be China when it’s time for delivery. Argentina is suspending corn exports until at least March and production estimates have trended lower for Brazil recently. Most of that is for the first crop, which has been affected by the same planting delays and weather issues as beans, and Brazil’s critical crop is the second crop, which won’t be available for export until mid-2021. Those South American factors likely mean the pace of U.S. sales will be accelerated even further. The USDA’s quarterly grain stocks and 2020 U.S. corn and soybean production totals are also out January 12th. Ethanol futures were unchanged.

The wheat complex was mostly modestly higher, with all three U.S. pits managing good weekly gains. Contracts were down early, but rallied thanks to the general tone in grains and oilseeds, and while the weekly numbers were good, export demand has slowed down just over halfway through 2019/20. Still, China was the leading buyer and even if the global supply outlook is bearish, the U.S. supply is at its tightest levels in years. The trade is watching weather for U.S. and Black Sea region winter wheat growing areas, along with harvest activity in Australia. The USDA’s winter wheat planted area numbers are out January 12th. Because of the drought or near drought conditions in the southern U.S. Plains, hard red winter acreage is in doubt, while some analysts are expecting the USDA to report larger than expected soft red winter planted area in the Midwest and southeast. DTN says Algeria bought 300,000 tons of optional origin wheat.

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