Soybeans fall below support, winter wheat gains
November 22, 2019 By John Perkins Filed Under: Closing Futures / Livestock Briefs, Crops Markets, Market News
Soybeans were lower on fund and technical selling, moving below what had been support. The trade was continuing to wait for some kind of significant reported progress in negotiations with China. China’s Ministry of Commerce has invited U.S. negotiators to Beijing for more talks this coming week, but there’s been no official U.S. response. The U.S. wants China to buy more U.S. ag goods and make concessions on technology transfer and intellectual property issues, while Beijing is pushing for a roll back on U.S. tariffs, with new duties scheduled to go into effect December 15th. Beans were also watching planting and development conditions in South America, which look mostly non-threatening to beneficial in the near-term. The recent rain in Brazil has slowed down planting though, while probable export tax policy changes by Argentina’s incoming Presidential administration have led some producers to shift from corn to soybeans. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Corn was mostly modestly lower, unable to hold onto the gains seen most of the session. Corn was also monitoring conditions in South America, while watching U.S. harvest activity. Near-term forecasts were mixed, with expectations for better progress in some areas than in others. The USDA is extending weekly national crop progress and condition reports until this year’s corn and soybean crops are fully harvested. Quality is an issue in some areas, as is propane availability. Export demand has been slow but is expected to improve as South American supplies tighten and prices shift. Corn is also waiting to see if the USMCA will be passed before the end of the year. Ethanol futures were higher. The wheat complex was mostly higher, with Chicago and Kansas City up and Minneapolis down. Precipitation in parts of the Plains will be beneficial as the winter crop heads towards dormancy and help to ease concerns about dry conditions in parts of the Plains. Excessive rain in parts of the European Union could limit planted area in a few countries. The USDA’s next set of supply, demand, and production numbers is out December 10th, with the department expected to project a record global supply. Losses in competing exporters have mostly been canceled out by larger crops from other competing nations. Stateside, quality has been an issue, but feed demand is expected to be good. Argentina’s wheat harvest is underway and demand is expected to be strong thanks to price and quality, with that nation’s ag ministry projecting the crop at 19 million tons. The strike by workers on Canada’s largest railroad is ongoing, but talks are reportedly making progress.
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