Market News

Soybeans up, but well below session highs

Soybeans were modestly higher on commercial and technical buying. Nothing has changed fundamentally, but contracts are overbought and beans closed well below the overnight and early highs. Most near-term forecasts have good rain in Brazil with lighter coverage in Argentina and longer-term concerns because of La Nina. The Buenos Aires Grain Exchange says 87% of Argentina’s soybeans are planted, compared to 90% on average, with 7% of the crop rated poor to very poor. Grain inspectors in Argentina continued their wage strike over the weekend. Export inspections were solid for a holiday week, with China and Mexico the top weekly recipients. The USDA says 191 million bushels of soybeans were crushed during November 2020, 6 million less than the all-time high for any month set in October 2020, but up 16 million from November 2019. Soybean meal was mixed on bear spreading, while soybean oil was lower on profit taking. The U.S. is reportedly banning palm oil imports from a major Malaysian producer because of allegations regarding the use of forced labor.

Corn was mixed, also unable to follow through on the solid start to the session, breaking the string of more than a dozen sessions with a gain. Corn is also watching the weather in South America, while also looking at a technically overbought market. The main drivers continue to be the tightening U.S. and world supply and solid demand, especially from the export and livestock feed sectors. The Buenos Aires Grain Exchange says 75% of Argentina’s corn crop is planted, compared to 81% on average, with 18% in poor to very poor shape. Weekly corn export inspections were bullish, with China and Mexico topping the list. Sorghum inspections were also bullish, with China the only reported destination. China will reportedly increase domestic corn planting this year, but for now, solid demand should continue. The USDA’s quarterly grain stocks figures, along with the final 2020 U.S. corn and soybean production totals are out on the 12^th. Ethanol futures were higher. The USDA says 431.661 million bushels of corn were used for ethanol production in November, down 1% on the month and 5% on the year, with DDGS production of 1,794,035 tons, a decrease of 2% from the previous month and 5% from the year before.

The wheat complex was mixed, with Chicago up, Kansas City down, and Minneapolis mostly steady to fractionally higher. The domestic supply is getting tighter, especially for the higher protein types, but the world supply remains neutral to bearish. The USDA’s next set of supply and demand estimates is out January 12^th, along with the winter wheat planted area totals. There’s talk of increased wheat feeding because of the corn fundamentals. Most forecasts have continued dry weather in the southern U.S. Plains and parts of the Black Sea region. The trade is also watching harvest progress in Australia. Weekly export inspections were bearish and 2020/21 now trails the 2019/20 pace by a slight margin. China was the largest single destination, followed by the Philippines. DTN says Algeria bought 300,000 tons of wheat, while Bangladesh is in the market for 50,000 tons of milling wheat.