Market News

Soybeans, corn, wheat find new buying interest

Soybeans were higher on fund and technical buying. Beans are watching near-term planting and development weather in South America, which generally looks favorable. Sustained demand from China is a concern due to slower economic growth. The continuation of Beijing’s zero-COVID policy is also an uncertainty. Even then, it’s a narrow window for U.S. soybeans this season ahead of what’s expected to be another record crop in Brazil. There’s talk that China will buy soybean meal from Brazil due to tight supplies. In addition to being the world’s biggest buyer of soybeans, China is the largest crusher of oilseeds. Mexico bought 261,272 tons of 2022/23 U.S. soybeans Tuesday morning. Soybean meal and oil futures were higher on the gains in beans. The NOPA says member firms crushed 184.464 million bushels of beans in October, in-line with expectations, with soybean oil stocks growing for the first time in eight months. The crush is running slightly behind USDA expectations.

Corn was higher on fund and technical buying. Mexico bought 230,185 tons of 2022/23 U.S. corn but overall export demand for U.S. corn continues to be slow, with prices at a premium to competing origins like Ukraine and Brazil. Long-term demand from Mexico is an uncertainty ahead of an expected ban on GMO corn imports starting in 2024. Interior cash basis levels are solid, with support from feed and fuel demand. In South America, there’s rain in the near-term forecast for most of Argentina and Brazil, but longer-term outlooks do have the potential for a return to drier conditions in Argentina. The USDA’s next round of supply, demand, and production estimates is out December 9^th. The session’s rally in crude oil was also supportive to corn and soybeans. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was higher on fund and technical buying. Contracts were down initially with signs the Ukraine grain export deal could be extended past this weekend’s expiration, but that was thrown into question Tuesday. While details were still sketchy during the session, it looks like the conflict in Ukraine could expand unless cooler heads prevail. Of course, so much of this is dependent on the mindset of Putin and the Russian government. In other words, sustained shipping through the Black Sea could be impacted greatly once again in the near future, which would have a drastic impact on global supplies of wheat, corn, and vegetable oils, in addition to other non-ag commodities. Ukraine’s Ag Ministry says 93% of its winter wheat crop has been harvested. The USDA’s winter wheat rating improved but remains near multi-year lows, with drought conditions expected to expand over the next few months. A big chunk of the crop will go dormant this week. The big test will be the crop’s condition when it emerges from dormancy next spring. Iraq reportedly bought 200,000 tons of U.S. hard wheat.