Market News

Soybeans, corn up on G20 hopes

Soybeans were higher on commercial and technical buying. The G20 got underway Friday and there was some optimism in the trade ahead of talks between the U.S. and China expected to occur Saturday. Still, this could be “buy the rumor, sell the fact” type trade. Unknown destinations bought 120,000 tons of 2018/19 U.S. soybeans. Given the recent purchase patterns, that could end up heading to Argentina to be crushed and resold. The trade is also monitoring development in South America, expecting generally good conditions in Argentina and Brazil, along with the remaining U.S. harvest. The USDA’s NASS doesn’t have a weekly crop progress report listed as being issued on Monday, December 3rd. Soybean meal and oil followed beans higher. The EPA left the biomass-based biodiesel volume requirement for 2019 unchanged at 2.1 million gallons, rising to 2.43 billion in 2020. Total advanced biofuel volumes will increase to 4.92 billion gallons in 2019.

Corn was higher on commercial and technical buying. Corn was also watching developments at the G20 following the signing of the USMCA Friday morning. The trade pact will now have to be ratified by the respective legislative bodies of the U.S., Canada, and Mexico. Steel and aluminum tariffs might impact the actual implementation of this new version of NAFTA. The trade will also continue to watch the tail end of this year’s harvest and potential quality issues. Ethanol futures were higher. The EPA increased its renewable fuel volume requirement for 2019 to 19.92 billion gallons, about 15 billion of which will be conventional, including ethanol, not accounting for small refiner waivers, a potential shift in policy between former Administrator Pruitt and Acting Administrator Wheeler. AgriCensus says South Korea bought 70,000 tons of corn Thursday, expected to ship out of the Pacific Northwest, matching a purchase earlier in the week. Two deliveries were posted for December corn on the first notice day.

The wheat complex was higher on commercial and technical buying, with the now in delivery December contracts posting the strongest gains. The trade is watching the last few thousand acres of winter wheat planting, with concerns acreage might not meet expectations, along with the generally slow emergence for this year’s crop. An additional drag on planting has been the slow soybean harvest pace in double crop areas. There was also support from the continued tensions between Russia and Ukraine and the potential disruption of trade. Still, at this point, about halfway through the marketing year for wheat, the export pace remains slow and the fundamental outlook continues to be bearish. No deliveries were reported on the first notice day for the Chicago or Kansas City December contracts.