Market News

Soybeans, corn, wheat down ahead of USDA numbers

Soybeans were lower on fund and technical selling. Most forecasts have near-term rain in parts of South America, helping cut down on dry areas in Argentina. Conditions in Brazil are comparatively better, with more than 55% of the crop planted. Near-term U.S. harvest conditions look mixed, but some producers should be able to wrap up for the season in the next few days. Updated USDA supply, demand, and production numbers are out Wednesday at Noon Eastern/11 Central. Analysts, on average, expect the USDA to raise the U.S. production and yield guesses slightly also anticipating higher new crop U.S. and world ending stocks. Additionally, CONAB’s updated outlook for Brazil is scheduled for Wednesday. Ahead of Tuesday’s open, Mexico purchased 144,000 tons of U.S. beans, China picked up 138,700 tons, and unknown destinations bought 132,000 tons, all for delivery during the current marketing year. The USDA’s attaché in China sees their domestic 2022/23 soybean crop at 19 million tons, close to record thanks following better yields, with imports at 96.5 million tons, compared to 91.6 million in 2021/22 because of improved soybean meal and oil demand. Soybean meal was higher and bean oil was lower on the adjustment product spreads. Additionally, soybean oil was technically overbought after the recent strength.

Corn was lower on fund and technical selling. The U.S. harvest is ahead of average, with near-term delays probable this week in parts of the Midwest and Plains. Ahead of Wednesday’s USDA supply, demand, and production report, analysts, on average, see near steady production and yield estimates with higher U.S. ending stocks against tighter new crop world supplies. Export demand continues to be slow, but domestic demand is solid, with cash basis levels. Interior cash basis levels remain near the recent highs and Mississippi River barge prices have dropped thanks to the recent Midwestern rainfall, in addition to some seasonal trends. Ahead of the open, Mexico did buy 338,600 tons of 2022/23 U.S. corn. Mexico’s potential ban on GMO corn imports is a big question mark for U.S. exporters. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. France’s Ag Ministry lowered its corn production estimate to 10.7 million tons, a more than 30 year low and down sharply on the year due to drought.

The wheat complex was lower on fund and technical selling. The trade is monitoring the fluid situation in the Black Sea region and crop quality concerns in eastern Australia following recent heavy rainfall. In the Black Sea region, Turkey’s government has offered to extend the Ukraine grain export corridor agreement another year, but that’s highly dependent on Russia continuing to cooperate with the deal. Moscow last week exited then reentered the agreement and has signaled it could exit again if certain concessions aren’t made during negotiations over the extension. 91% of Ukraine’s winter wheat crop has been planted, with total acreage expected to be considerably smaller than last year due to Russia’s invasion. Egypt canceled its import tender, citing high prices. The biggest changes for wheat Wednesday in the supply and demand update are expected to be on the global side of the ledger, but even then, November is typically a pretty quiet month for adjustments. On average, analysts see steady old crop ending stocks and slightly tighter new crop supplies. The USDA’s winter wheat rating improved slightly but remains near historically low levels ahead of the crop moving into dormancy. Long-term forecasts continue to show expanding drought in much of the Plains and parts of the Midwest, which will be an issue when winter wheat emerges next spring. The USDA’s attaché in Canada estimates 2022/23 wheat production at 34.703 million tons, compared to 22.296 million in 2021/22, because of increased planted area and improved yields. The office projects exports at 25 million tons, which would also be quite a bit larger than last marketing year.