Market News

Soybeans, corn see post-Christmas gains

Soybeans were modestly higher on speculative and technical buying, ending the session near the day’s lows, unable to hold above $15. Most forecasts have a return to hot, dry weather in much of Argentina and parts of southern Brazil, likely causing at least some crop stress. Northern and central Brazil looks comparatively favorable for planting and development, continuing to expect record production. The trade is monitoring the spread of COVID in China and the possible demand impact. Beijing has ended its zero-COVID policy and cases are spreading rapidly in the world’s biggest buyer of soybeans. China was the top destination for U.S. soybean export inspections last week, followed by Germany, with the overall pace still behind 2021/22. Soybean meal was lower and bean oil was higher on product spread trade.

Corn was higher on speculative and technical buying, closing just under the session’s highs. The weather in South America has pulled condition ratings in Argentina well below year ago levels and has probably impacted corn acreage. That’s also probably an issue for first crop corn in southern Brazil, but the big test for that nation is the second crop, which is planted after soybeans are harvested. Japan bought 177,500 tons of U.S. corn Tuesday morning, with 7,500 tons for 2022/23 delivery and the remaining 170,000 for 2023/24. Corn export inspections were up on the week, down on the year, primarily to Mexico and China. COCERAL says 2022 European Union corn production was 64.5 million tons, compared to 50.7 million last year thanks to greatly improved yields in most countries. Russia’s Ministry of Agriculture says 2022 corn production was 13.93 million tons.

The wheat complex was mixed. Kansas City was up as some winterkill is possible in the Plains, even if the extent of any damage won’t be fully known until spring. Chicago finished lower on a lack of follow-through buying and Minneapolis was mixed, consolidating after that pit’s initial gains. Russia continues to attack Ukraine, while also pushing for peace talks. Russian wheat remains the most competitive on the export market due to the drop in the ruble. Russia’s Ministry of Agriculture says 2022 wheat production was 105.7 million tons. Ukraine’s crop was reportedly 20.5 million tons, good enough for 10^th place globally, but well below a year ago following the invasion. COCERAL says the European Union sees wheat production at 143.2 million tons, compared to the old crop total of 140.7 million. U.S. wheat inspections were below the previous week and last year, but the pace remains just ahead of what’s needed to meet projections for 2022/23. The leading destinations were Mexico and Thailand.