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Soybeans gain, waiting for phase one signing with China
Soybeans were modestly higher on short covering and technical buying. Support came from the continued optimism about China, with the phase one signing expected for the 15th. The delegation from Beijing is expected to arrive on the 13th and depart on the 16th. Weekly export inspections were bullish, China was the top destination, but no new large sales of U.S. beans have been announced since December 23rd. The USDA’s weekly export sales report out Thursday will cover the week ending January 2nd. The renewed geopolitical tensions had less of an effect on commodities and equities Monday than on last Friday. Beans are also watching conditions in South America, along with the early harvest activity in parts of Brazil. Recent rainfall has improved conditions in Argentina, with 85% of their crop planted. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.
Corn was modestly lower on fund and technical selling. Corn is also watching conditions in South America, which generally look good, including more rain in the forecast for parts of Brazil. U.S. weekly export inspections were bearish and the overall 2019/20 pace continues to trail 2018/19 by a significant margin. South America and Ukraine have been the primary culprits for the decline in demand. The USDA’s supply, demand, and production numbers are out Friday, including the 2019 totals for corn and beans. Most analysts expect lower-than-November estimates for corn and soybeans, the question is if those totals will be adjusted further because of widespread harvest delays. The U.S. Senate could vote on the USMCA as early as this week. Ethanol futures were steady to weak.
The wheat complex was mixed, with Chicago up, Kansas City down, and Minneapolis fractionally mixed. Friday’s USDA numbers will have the first official winter wheat planted area estimate. Acreage should be below a year ago, but there’s a lot of uncertainty about the domestic numbers heading into the report because of the planting delays in key growing areas late last year. Conditions vary widely, much better in some areas than in others. The international numbers are a little more certain. The USDA is expected to make some adjustments to world production figures, while maintaining the record projected global supply. A probable downward revision is in Australia, which is currently experiencing devastating wildfires. Those USDA numbers are out Friday at Noon Eastern/11 Central. Weekly export inspections were less than what’s needed to meet USDA projections, but the overall pace remains ahead of last marketing year. DTN says there are open wheat export tenders from Ethiopia, Jordan, Morocco, Syria, and Turkey. More than 90% of Argentina’s wheat crop is harvested.
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