Market News

Soybeans up on fundamentals

Soybeans were higher on commercial and technical buying, finishing near the highs of the session. Beans followed through on Monday, with help from global vegetable oils, especially palm oil, which also supported soybean oil futures. Domestic crush margins are solid, supplies are tight, export demand is good, and near-term forecasts for South America are generally dry, including a chance for colder weather in parts of Argentina. That drier stretch should help planting pick up steam in Brazil. The U.S. soybean harvest should wrap up in some areas in the next few days. Soybean meal was mixed on bear spreading, with nearby contracts down and deferred months up. The USDA says 168 million bushels of soybeans were crushed during September, down 7 million from August, but up 4 million from September 2021, with soybean meal and oil stocks tightening on solid demand. The USDA’s next soybean crush estimate is out in the supply, demand, and production update scheduled for Wednesday, November 9^th.

Corn was higher on commercial and technical buying, bouncing back from early losses. Corn remained largely rangebound, continuing to monitor U.S. harvest activity, expecting mixed, but mostly good, near-term progress, with low river levels impeding movement to port, especially on the lower Mississippi. Planting in South America is slowly moving forward, with weather a continued problem in some areas. Argentina’s also dealing with a stevedore strike at a major part and movement in Brazil is partially limited by trucker blockades following Sunday’s presidential election. Still, those blockades are only expected to last a little bit longer, dampening some of the impact. The trade is also watching the developing situation in the Black Sea region. Ukraine had taken over a major share of the corn export market, but that’s in doubt due to more Russian attacks and Moscow signaling unhappiness with the Black Sea export corridor. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. The USDA says 383.088 million bushels of corn were used for fuel alcohol production in September, down 11% on the month and 6% on the year, with DDGS production of 1.61 million tons, a decline of 14% from the previous month and 8% from a year ago.

The wheat complex was higher on commercial and technical buying, roaring back after initial profit taking. Russia says they’re not pulling out of the Ukraine grain export deal, just suspending it, but it’s not uncommon for Moscow to say one thing and do another. Russia’s invasion has also impacted harvest and planting in Ukraine. Stateside, 28% of U.S. winter wheat is rated good to excellent, with 35% poor to very poor, and most forecasts show expanding drought conditions in much of the Southern U.S. Plains ahead of the crop heading into dormancy. The global supply, minus China, remains tight, and with crop production issues also reported in Argentina and Australia, it’s only expected to get tighter, even with record production for Russia. Throw in the sanctions against Russia and Russia slowing down shipping from Ukraine, which exacerbate the situation even further, creating a lot of questions about availability in the coming months. The USDA says 237.204 million bushels of wheat were ground for flour production from July through September of 2022, 2% more than the second quarter and 3% above the third quarter of 2021.