Market News

Soybeans mixed, corn, wheat down after USDA numbers

Soybeans were mixed on bull spreading. The USDA’s domestic production and ending stocks estimates were both a little bit larger than expected, with higher production canceling out greater crush use, and the world numbers were bearish. World ending stocks were higher with production slightly lower. The USDA did cut the crop guesses for Argentina, the European Union, and Mexico, but that was offset by the gain in the U.S. with no change for Brazil. USDA did raise the export outlook for Argentina slightly, while leaving exports for Brazil and imports by China steady with October. CONAB has Brazil’s crop at 153.538 million tons, up 0.8% from October and 22.3% from 2021/22. The USDA’s next set of supply and demand estimates is out December 9^th. Crush margins are solidly in positive territory and overall demand is solid with China and unknown destinations both buying U.S. beans ahead of the open, 264,000 and 198,000 tons, respectively, both for the current marketing year. That brings the two-day sales total to 876,700 tons. Sustained demand from China is a question mark because of Beijing’s zero-COVID policy. The USDA’s weekly export sales report is out Thursday morning. Soybean meal was lower and soybean oil was higher, adjusting product spreads.

Corn was modestly lower on fund and technical selling. USDA’s production and domestic ending stocks projections were both above a month ago. Somewhat surprisingly, the USDA made no changes to the corn export estimate, despite the relatively slow demand, but did raise feed use. There were no changes for domestic ethanol use. Global production and carryout were both down modestly from October. The USDA left production and exports unchanged for Argentina, Brazil, and Ukraine. CONAB sees Brazil’s total corn crop at 126.397 million tons, 0.4% less than a month ago, but 12% above a year ago. The estimates for the first and second crops were slightly lower than last month. First crop corn planting is ongoing, while the second crop will be planted after soybeans are harvested. In what would be a big blow to U.S. exports, Mexico’s president says it won’t buy GMO yellow corn from the U.S. ahead of a full ban on GMO corn imports and the phasing out of glyphosate use by 2024. The U.S. Energy Information Administration says ethanol production last week averaged 1.051 million barrels a day, the highest since late June and up 11,000 on the week and 12,000 on the year, while stocks were reported at 22.192 million barrels, a decrease of 40,000 from the previous week, but an increase of 1.906 million from a year ago.

The wheat complex was lower on fund and technical selling, in addition to the higher move in the dollar. U.S. wheat ending stocks were modestly lower than last month following an increase in the food use projection against a slight cut in seed. The USDA’s world production and ending stocks estimates were up on the month. The USDA raised production outlooks for Australia, Brazil, and the United Kingdom, while reducing expectations for Argentina and the European Union. Still, that higher estimate for Australia is deceptive because of quality concerns related to heavy rainfall in some key growing areas. The situation remains fluid in the Black Sea region, so there were no adjustments for either Ukraine or Russia. The trade is waiting to see if the Black Sea grain agreement covering Ukraine’s export corridor will be extended, with the deal set to expire later this month. Moscow is asking for significant concessions during ongoing negotiations. The European Union says that since the start of the marketing year, wheat exports are 12.52 million tons, compared to 11.92 million tons this time last year, with France accounting for 5 million tons of the total. Markets and the USDA are closed Friday for Veterans Day.