Market News

Soybeans, corn mixed, wheat down ahead of USDA reports

Soybeans were mostly modestly lower on spread trade and profit taking after a wide-ranging session. Most forecasts have much-needed rain this week in parts of South America, but longer-term outlooks are uncertain because of La Nina. The USDA will likely lower production estimates for Argentina and Brazil Tuesday because of the drier than normal weather during planting and development and will probably also lower U.S. ending stocks because of strong demand. Safras e Mercado says 57.7% of Brazil’s new soybean crop has been sold, well ahead of both last year and the average. CONAB will also be issuing new estimates for Brazil Tuesday. Monday, China bought 132,000 tons of 2020/21 U.S. beans, the third business day in a row with an announced sale of U.S. beans. Weekly export inspections were bullish, with China and Mexico the top weekly destinations. Soybean meal was higher and bean oil was lower, adjusting product spreads. Malaysia’s Palm Oil Board says domestic inventories are at a more than 10-year low.

Corn was mixed, adjusting old/crop new crop spreads. Corn is also watching weather in Argentina and Brazil, while also getting ready for what’s expected to be bullish sets of USDA supply and demand and quarterly stocks estimates. The USDA will also be issuing the final 2020 U.S. corn and soybean production numbers on the 12^th. Weekly export inspections were solid for corn and sorghum, with China taking the top spot for both commodities. China has reportedly approved two new GMO corn varieties to meet demand. Ahead of the open, Colombia picked up 108,500 tons of 2020/21 U.S. corn. Ethanol futures were unchanged. Argentina’s government has scrapped a suspension of the nation’s corn export registry following discussions with major grain group, instead moving to a cap of 30,000 tons a day until the new crop harvest starts.

The wheat complex was modestly lower on fund and technical selling, along with the higher U.S. dollar index. Wheat was also getting ready for the USDA numbers, including winter wheat planted area, with most analysts expecting an increase in acreage. The trade will also monitor U.S. carryout and quarterly stocks projections and the global supply and demand numbers closely. World wheat prices were higher heading into the U.S. session with market chatter that Russia will raise export taxes further to ration demand. Both Russia and Ukraine saw widespread dry weather during planting and early stages of development, ahead of the crop entering dormancy. U.S. winter wheat conditions are mixed, with drier than normal weather an issue in some key growing areas, with the next set of USDA state stories out January 26^th. Weekly export inspections were bearish, with the 2020/21 pace slightly behind 2019/20. China’s National Grain Trade Center says Beijing sold 2,099,199 tons of wheat from state reserves last week, just over 52% of the offer. DTN says Syria is tendering for 25,000 tons of milling wheat.