Market News

Soybeans, wheat finish mixed as corn drifts downward

Soybeans were mixed on bull spreading, with nearby contracts firm and deferred months weak. Export sales were down sharply on the week but did feature solid demand from China against a cancellation by unknown destinations, most of which was switched to China. On the bull side, crush margins remain bullish and soybean meal was up, while on the bear side, bean oil was down and the U.S. harvest is ongoing. The trade is also watching planting in South America, with rain in the forecast for portions of Paraguay and southern Brazil. Argentina’s Ag Ministry says 70.3% of that nation’s old crop soybeans have been sold, compared to 74.2% at this point last marketing year. Farmer sales were up sharply in September following Buenos Aires’ implementation of the “soy dollar” program, but have dropped off in October with the expiration of the scheme. The USDA’s next set of supply, demand, and production numbers is out November 9^th, along with an updated outlook for Brazil from CONAB.

Corn was modestly lower on fund and technical selling. Corn export sales were down on the week, with U.S. supplies holding a big premium over competitors. Sales were barely over a quarter million tons, but on the positive side of things, China was the leading buyer, followed by Mexico. That slow demand and the premium to other origins are largely due to the dollar, while shipments have been slowed down by low river levels delaying movement to ports. The lower Mississippi River has reopened to barge traffic, but there are restrictions. Domestic demand continues to be strong and cash basis levels are very high at the points that have not seen significant movement delays. More minor near-term harvest delays are likely in parts of the region ahead of a generally drier pattern next week. Corn is also watching planting activity in Argentina and Brazil. The USDA’s attaché in Argentina sees 2022/23 corn production for that nation at 52 million tons, 3 million below the last official guess, with exports of 37.5 million tons, 3.5 million lower. Planted area in Argentina is expected to be below a year ago. Argentina’s Ag Ministry says 69.4% of the 2021/22 corn crop has been sold, compared to 67.6 million this time last year. Safras e Mercado projects Brazil’s combined corn crop at a record 126 million tons – if weather holds up.

The wheat complex was mostly lower, with pressure from the dollar. U.S. export demand continues to be slow and while there are some bright spots for global production, like a record crop in Russia, there are also year-to-year declines in the cards for some major producers. There have been lower production estimates this week for Argentina because of drought and rain in Australia during harvest could harm crop quality. For Argentina, the USDA’s attaché in Buenos Aires pegs 2022/23 wheat production at 15.5 million tons, 2 million less than the official guess, with the office lowering the export outlook to 10 million tons. Sustained export sales from Ukraine continue to a question mark, with Russia pushing for concessions in exchange for an extension of the Black Sea export corridor, while Moscow also delays inspections of Ukrainian vessels to slow down shipments. Dry parts of the southern U.S. Plains should see rain late this week, but longer-term outlooks point to expanding drought conditions in the region. While drought is also an increasing concern for the soft red winter areas of the eastern Midwest, the big test for U.S. winter wheat will be conditions when the crop emerges from dormancy next spring. Export sales moved over a half a million tons, with South Korea and unknown destinations topping the list.