Market News

Soybeans, corn, wheat in positive territory Thursday

Soybeans were higher on fund and technical buying. Contracts saw follow through from Wednesday and spillover from bean meal. Domestic crush margins remain bullish and U.S. harvest activity is ongoing. Interior movement is an issue in some areas due to lower water levels on some major rivers. Export sales last week topped 2.3 million tons, China was by far the biggest buyer, and China and unknown destination bought more U.S. beans Thursday morning, 201,000 and 132,000 tons, respectively. The International Grains Council estimates 2022/23 global soybean production at 386 million tons, compared to the September guess of 387 million and the 2021/22 total of 355 million tons. Month-to-month, the IGC raised new crop trade and carryover, while leaving consumption unchanged. The trade is monitoring planting in South America. The USDA’s attaché for Brazil raised its planted area projection citing record prices and now pegs production at 148.5 million tons, 4.5 million more than the prior projection, with exports of 95.7 million tons, 3.7 million tons higher. Argentina is expected to plant a bigger crop this year, with soybeans taking some acres from corn due to profitability, even with widespread drought in that nation. The Rosario Grain Exchange has Argentina’s production at 48 million tons. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. China’s National Grain and Oil Information Center says their domestic crush moved higher last week and stocks were tighter.

Corn was modestly higher on fund and technical buying. Corn is oversold, with help from strong livestock feed demand and the improved weekly ethanol numbers from Wednesday. Export demand continues to be slow, with weekly sales just over 400,000 tons. The U.S. harvest is ongoing and the trade is assessing yields ahead of the November 9^th supply, demand, and production update. Like beans, corn is seeing interior movement problems tied to low water levels on some major waterways. There is some rain in the forecast for the Midwest over the next few days, which could provide a short-term boost to those water levels, but much more will be needed. The International Grains Council projects 2022/23 global corn production at 1.166 billion tons, down 2 million from last month due to decreases for the Ukraine, European Union, and the U.S. and well below the 2021/22 total. From September to October, the IGC left trade unchanged while lowering the outlooks for consumption and carryover. Strategie Grains has the E.U. corn crop at 50.4 million tons, compared to 52.9 million a month ago, but raised the import estimate. Corn is watching planting activity in South America. Conditions are generally good in Brazil, but after some short-term rain, Argentina is expected to see a return to a very dry pattern. The Rosario Grain Exchange sees the crop at 56 million tons.

The wheat complex was higher on fund and technical buying, along with weak trade in the U.S. dollar during the session. The trade continues to monitor the ever-changing situation in the Black Sea region. Ukraine’s Black Sea grain exports are nearly back at pre-war levels, while Russia’s sales have softened due to sanctions. SovEcon raised its 2022 Russian wheat production estimate to 100.6 million tons, 600,000 more than the prior guess. Large portions of the U.S. hard and soft red winter regions remain very dry, with limited rain in the near-term forecast. Still, conditions will be a more closely watched topic when the crop emerges from dormancy next spring. Weekly U.S. wheat sales were bearish, down on the week and barely over 160,000 tons. The International Grains Council estimates 2022/23 world wheat production at 792 million tons, unchanged on the month and up from the 2021/22 total of 782 million tons. The IGC reduced trade and consumption expectations slightly, while leaving ending stocks unchanged from last month. Strategie Grains sees 2022/23 soft wheat production at 125.5 million tons, up 1.4 million from September. The Rosario Grain Exchange pegs Argentina’s wheat crop at 15 million tons, down a million on the week due to drought and frost damage.