Market News

Soybeans, corn finish mixed Friday with wheat lower

Soybeans were mostly higher, with help from bean meal, but the most active months were still lower on the week. Weather forecasts show continued drought in Argentina and scattered rain in southern Brazil ahead of a drier pattern. Conditions are comparatively much better in central and northern Brazil with that nation still on track for a record crop. It looks like La Nina conditions will linger in South America through at least the end of 2022. Export demand for U.S. soybeans has improved, with commitments ahead of a year ago. Soybean meal was up on commercial buying and spread adjustments against bean oil. Bean oil was down on that spread trade and a drop in crude oil, but the long-term demand outlook for bean oil is supportive because of renewable fuel demand.

Corn was mostly fractionally lower, slightly trimming the week’s modest gains. Corn is watching conditions in South America, but the big test will be Brazil’s second crop, which is planted after soybeans are harvested. CONAB’s next production projection for Brazil and the USDA’s updated supply and demand numbers are out January 12^th, along with the USDA’s preliminary 2022 production totals for U.S. corn and soybeans. Ethanol margins have fallen and export demand is bearish due to competition from Brazil and Ukraine, but feed demand is solid and the national cash basis remains strong.

The wheat complex was lower on fund and technical selling but did manage to post week-to-week gains. The fundamental outlook remains bearish with Russia continuing to hold a big chunk of the export market, along with Ukraine. The Black Sea region remains in turmoil with more recent Russian attacks on Ukrainian infrastructure. Exports are leaving Ukraine, but that’s being complicated by weather and slow inspections by Russia. Russia Federal State Statistics Service says December 1^st grain stocks were 39.4 million tons, up 10 million on the year, including 25.6 million tons of wheat, 8.8 million more than a year ago. Winterkill is a possibility for the hard red winter crop in parts of the southern U.S. Plains, but that won’t be able to be quantified until the crop emerges from dormancy next spring. Other portions of the Plains have recently received some much-needed precipitation and snow cover ahead of that bitterly cold pattern.