Market News

Soybeans see solid gains as wheat, corn decline

Soybeans were sharply higher on commercial and technical buying. Unknown destinations bought 132,000 tons of 2023/24 U.S. beans, bringing the total over the past four business days to 525,000 tons, all either to China or unknown. This uptick in sales follows the planting delays and development issues in Brazil. Recent rain in dry parts of Brazil has helped, but forecasts have only scattered precipitation for a next week and there is a long way to go in the season. Also, large portions of southern Brazil remain excessively wet. Further reductions to Brazil’s production projections are likely, with CONAB’s next guess set for January 4^th, 2024. Soybean meal and oil were supported by commercial buying. Argentina’s new president was inaugurated Sunday and while he is widely expected to make a more “friendly” environment for farmers and exporters, those policies have been announced, but are yet to be implemented. Just 2% of Argentina’s soybean crop is rated poor, much better than this time last year. U.S. soybean export inspections were down on the week and the year, mainly to China and Mexico. How much of the slowdown in soybean shipping is related to low levels on the Mississippi River and Panama Canal remains unknown.

Corn was modestly lower on fund and technical selling. Corn is watching weather in South America, with slow soybean planting expected to impact Brazil’s second crop. That’s still a couple of months off, the second crop is planted after soybeans are harvested, and planted area was already expected to be down on the year. Conditions in Argentina continue to look generally favorable with a scant 2% of the crop in poor to very poor condition thanks to a significant improvement in weather. 40% of Argentina’s corn crop is planted. The USDA’s next set of supply, demand, and production numbers is out January 12^th, 2024, the same day as the USDA’s preliminary final 2023 production totals. U.S. export inspections were lower than last week, but higher than last year, and still more than what’s needed to meet USDA projections for the current marketing year. The leading destinations were Mexico and China. China’s National Bureau of Statistics is projecting record corn production of 288.84 million tons.

The wheat complex was sharply lower on fund and technical selling, along with the firm to higher trade in the dollar during the session. There were no announced sales of 2023/24 U.S. soft red winter wheat to China, breaking that recent streak. China last week bought at least 1.12 million tons of U.S. SRW, trying to shore up supplies after crop damage in northeastern growing areas, with a slowdown in shipping out of the Black Sea region and questions about the quality of some of Australia’s crop. Russia continues to maintain the upper hand on the export market and Ukraine is still exporting grain, just at a slower pace following the collapse of the Black Sea Grain Initiative. U.S. export inspections were up from a week ago, but down from a year ago, primarily to Japan and Mexico. Just over the halfway point for 2023/24, the shipping pace remains slower than 2022/23. U.S. winter wheat is in good shape, but large parts of the southern Plains remain drier than ideal. China’s National Bureau of Statistics says 2023 wheat production was 136.6 million tons.