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Soybeans, corn up on broader market, harvest delays
Soybeans were higher on short covering and technical buying. The outside markets were supportive, crush margins are bullish, and parts of the region have seen harvest delaying rain. There isn’t much chatter about it yet, but that could also lead to reports about compromised quality in some areas. Parts of South America are expecting rain this week ahead of a generally drier pattern. That’s expected to impact production in very dry portions of Argentina and southern Brazil. CONAB’s next update for Brazil’s crop is scheduled for November 9th. Soybean meal and oil were up on the positive tones in soybeans and the outside markets, those crush margins, and demand expectations. Monday’s bearish reaction to China’s Xi Jinping getting a third five-year term was probably overdone, with some now taking a more wait and see approach. Chinese soybean demand has improved recently as their supplies have tightened, but some of the political stances taken by Xi and China’s zero-COVID policy are casting doubts on sustained demand expectations.
Corn was higher on short covering and technical buying, in addition to spillover from the outside markets. Harvest is ahead of average and rain in the Midwest and Plains is only causing a temporary delay in most areas. That rain should boost Mississippi River levels, but much more is needed. The USDA’s next set of supply, demand, and production numbers is scheduled for November 9th. Corn is also watching planting and early development weather in South America. The European Union’s crop group MARS lowered its outlook for the bloc’s corn crop again, citing drought, but expects better conditions for winter planted crops. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. APK-Inform says Ukraine exported 27 million tons of corn during 2021/22, which ended in September. The firm sees 2022/23 Ukraine corn exports at 24 million tons of the export corridor holds, 14.4 million tons if it doesn’t.
The wheat complex was mixed with Kansas City and Minneapolis down and Chicago mostly lower, except for a couple of far-off deferred contracts. Rain coverage in the Plains has been broad, with more on the way, but it has missed some of the drier areas. Either way, it’s welcome, even if the big test for winter wheat will be conditions when the crop emerges from dormancy next spring. The trade continues to monitor developments in the Black Sea region. Ukraine’s grain exports are nearly at pre-war levels with negotiations to extend the Black Sea corridor past the November 22nd expiration date. Moscow wants concessions, even as it continues to attack Ukraine, and is delaying ship inspections to hamper Ukrainian trade. Russia’s exports have been impacted by sanctions and some nations switching to Ukrainian origin wheat. One big customer for Black Sea wheat is Nigeria, with the USDA’s attaché in Lagos reporting that nation is diversifying their suppliers because of the uncertainties about shipments out of the region. The USDA’s attaché in Kazakhstan left 2022/23 wheat planted area steady with the previous guess, with acreage, production, and exports expected to rebound from 2021/22. The attaché for Australia sees 2022/23 wheat production at 34 million tons, 2.5 million less than 2021/22, but still the second largest on record. The caveat is the potential for heavy rainfall during harvest reducing crop quality, downgrading from food to feed wheat.
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