Market News

Soybeans, corn give back gains

Soybeans were lower on profit taking and fund selling. The trade continues to wait and see what happens with the next round of U.S. tariffs on China, scheduled for the 15^th. White House trade adviser Peter Navarro says what happens with the tariffs is up to President Trump and National Economic Council director Larry Kudlow says tariffs are still on the table. The President has said the tariffs will be enacted if phase one of the proposed trade deal is not signed by Sunday. China bought 585,000 tons of U.S. beans, confirming some of the recent rumors and filling part of Beijing’s tariff waiver, and unknown destinations picked up 140,000 tons, both for 2019/20 delivery. Beans are also monitoring conditions in South America. Soybean meal and oil were lower on profit taking, following beans.

Corn was lower on profit taking and fund selling. Tuesday’s USDA numbers were mostly neutral, but the USDA did raise the global supply estimate on a bigger crop for China. The USMCA has been signed, but now must be passed by Congress and NAFTA still must be repealed. The deal will also have to be officially enacted by Canada and Mexico. The U.S. House of Representatives could vote on the USMCA next week ahead of the Christmas break, but Senate Majority Leader Mitch McConnell says that body won’t vote on the pact until January. Corn is also watching weather in Argentina and Brazil. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.072 million barrels a day, up 11,000 on the week for the highest average since late June, and stocks climbed 1.176 million barrels to 21.815 million, but that’s still 1.095 million below a year ago.

The wheat complex was mostly lower. Chicago and Kansas City were down on profit taking, while Minneapolis was fractionally mixed, consolidating. Tuesday’s domestic USDA numbers were neutral to bullish with ending stocks expected to be the lowest in some time, but the department did raise world ending stocks, continuing to project a record global supply. Wheat is about halfway through the 2019/20 marketing year. The USDA’s next set of supply and demand estimates is out January 10^th. Wheat is also watching winter wheat development weather, with dry spots in parts of the southern U.S. Plains. DTN says Taiwan is tendering for 104,600 tons of U.S. milling wheat and Egypt bought 355,000 tons of wheat, 120,000 tons from France, 115,000 tons from Russia, and 60,000 tons each from Romania and Ukraine. The USDA’s weekly export sales report is out Thursday morning.