Market News

Soybeans rally, hit more highs

Soybeans were higher on commercial and technical buying, helping contracts post a strong week to week move and November hit a four-year high for a spot price. Contracts were down early but rallied on demand and a higher move in meal and oil because of a lower crush rate in Argentina. Farmers in Argentina have been slow to sell because of concerns about continued economic inflation. Argentina is the world’s largest exporter of soybean products. The trade is watching weather, expecting a better planting pace in South America, along with U.S. harvest delays. Prices in Brazil are around 6-year highs, keeping U.S. beans at a competitive advantage. Soybean meal was mostly higher and soybean oil was up, with commercial interest featuring heavily for both.

Corn was mixed on spread adjustments, with nearby months up and deferred contracts down, and the most active months posting good weekly gains, including a one-year high for December. Unknown destinations bought 100,000 tons of 2020/21 U.S. corn and there’s talk China will increase its tariff rate quota for imports, but no confirmation. China has already purchased more corn this marketing year than what the USDA is currently projecting, but most of that still needs to be shipped. If half of the sales to unknown destinations are eventually switched to China for delivery, as some are expected, the running total is even further above the USDA’s mark. Corn is also watching planting in South America and harvest in the United States, expecting a better pace for Argentina and Brazil against delays stateside. Those planting delays in South America and the strong demand from China have helped December corn gain about $1 since early to mid-August. The Buenos Aires Grain Exchange says 27% of Argentina’s corn crop is planted with 9% of the crop called poor to very poor. Ethanol futures were steady.

The wheat complex was higher on commercial and technical buying, cementing a solid weekly close. Most forecasts have at least another two weeks of warm, dry weather in portions of Russia and Ukraine, extending drought conditions for two key exporters, both of which have seen a surge in price because of the weather woes. Parts of the U.S. Plains will see some precipitation, but cold temperatures could harm the emerging winter wheat crop. The USDA’s next crop progress and condition report won’t reflect much, if any, of the potential damage. France has seen a drier period, allowing winter crop planting to pick up steam, with 45% of soft wheat planted, compared to 12% the week before and 27% this time last year. The Buenos Aires Grain Exchange cut its’ wheat production outlook for Argentina by 700,000 tons to 16.8 million because of dry weather, with 50% of the crop in poor to very poor shape. DTN says Tunisia bought 50,000 tons of milling wheat from an unknown origin and Egypt is tendering for an unspecified amount of optional origin milling wheat.