Market News

Soybeans see another round of weather support

Soybeans were modestly higher on speculative and technical buying. Subsoil moisture is short in Argentina with a return to dry weather in the forecast after some weekend rain. The Buenos Aires Grain Exchange says 10% of Argentina’s soybean crop is in good to excellent shape, compared to 57% this time last year, with planting 72% complete. Conditions for most of Brazil are comparatively better, but there are concerns about dry weather in some southern growing areas. However, any losses in that region could be offset by production in the rest of Brazil, which might also be enough to cancel out losses in Argentina. The USDA’s next round of domestic and international supply, demand, and production numbers is out January 12^th. Domestic crush margins remain strong and bean oil was up on an oversold bounce, while bean meal fell on profit taking. China’s state grain buyer COFCO and state grain group Sinograin are teaming up in 2023 to manage grain reserves.

Corn was mixed on bear spreading. Corn consolidated while watching development conditions in South America. The Buenos Aires Grain Exchange says 15% of Argentina’s corn crop is in good to excellent condition, compared to 58% a year ago, with 63% planted. Weather looks good in central and northern Brazil, but the big test will be their second crop, which is planted after soybeans are harvested. CONAB’s next outlook for Brazilian production is January 12^th. Corn continues to look at steady feed demand against bearish exports and signs of slower demand for ethanol use. The U.S. Energy Information Administration says ethanol production last week was the lowest since early October at 963,000 barrels a day, a decline of 66,000 on the week and 96,000 on the year due to weather in the Midwest and Christmas. Stocks were reported at 24.636 million barrels, the largest in 37 weeks and up 569,000 from the previous week and 3.96 million from a year ago.

The wheat complex was sharply lower on profit taking and technical selling. Most forecasts have improved rain chances in parts of the Plains, probably still missing southwestern areas, but improving prospects for the rest of the region. Any winterkill damage from the recent cold snap won’t be known until the crop emerges from dormancy. Russia is reportedly delaying inspections of Ukrainian vessels, slowing exports as the conflict between two of the world’s largest wheat exporters continues. There are also increasing concerns about insurance for vessels leaving the Black Sea because of the ongoing fighting. After initial reports of a sale of 80,000 tons of Russian wheat to Egypt, it looks like the sales total was 200,000 tons. The USDA’s weekly U.S. sales numbers are out Friday at 8:30 Eastern/7:30 Central.