Market News

Soybeans up to end the week, corn, wheat mixed

Soybeans were modestly higher on short covering and technical buying, adding to the week’s gains. It was an up and down day for beans, watching U.S. harvest activity, with contracts finding support from the lower trade in the dollar. Additionally, soybean meal and oil ended the day just under the session highs, supported by strong crush margins. There was also some follow-through support from Thursday, which was tied to the most recent USDA export sales report. China’s crush margins have improved due to strong demand and tight supplies, with uncertainties about beans from Brazil due to slow farmer selling and the U.S. because of interior movement problems. Soybeans are keeping a close eye on planting in Argentina and Brazil, with CONAB’s next round of projections for Brazil out November 9^th.

Corn was narrowly mixed Friday, still ending the week with modest losses. There were some near-term harvest delays in the forecast, but most of the region should have made good progress over the past week. The USDA’s next set of supply, demand, and production estimates is out November 9^th. Low levels on the Mississippi River are drastically limiting interior movement, with some sections of Missouri, Kentucky, and Tennessee closed for dredging. The rain expected in the Midwest in the coming days will help but won’t be nearly enough to restore river levels. Export demand for U.S. corn continues to be slow, with some of the blame for reduced shipments falling on those interior issues, but ethanol demand might be improving and feed demand is good. That said – the USDA’s latest Cattle on Feed report is pointing to even tighter market ready supplies, which would impact feed demand. The possible rail strike is wildcard waiting in the background. Corn is also monitoring planting in South America.

The wheat complex was mixed, also seeing a mixed finish for the week. Rain is in the forecast for parts of the Plains, but not enough to break the drought in most of the region. Longer-term outlooks for most of that region continue to look generally dry as well. It’s an issue for hard red winter wheat as the crop heads into dormancy but will be an even bigger deal when it emerges from dormancy next spring. Heavy rain in Australia ahead of harvest is creating concerns about their crop quality. That’s an important crop for importers in Asia and will also be closely watched because of the uncertainties about exports from the Black Sea region. Ukraine’s grain exports are roughly at the same level as shipments prior to Russia’s invasion, which could change after November 22^nd. Negotiations to extend Ukraine’s Black Sea export corridor past that date are ongoing, but Russia is definitely reluctant to extend that agreement without some concessions from Kyiv, Turkey, and the U.N. Ukraine’s grain production has also been greatly impacted by Moscow’s invasion. Russia’s own exports of their record wheat crop have been hampered by sanctions. The Buenos Aires Grain Exchange pegs Argentina’s wheat crop at 15.2 million tons, 1.3 million less than their last guess, citing drought.