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Wheat up, corn and soybeans mixed ahead of USDA reports

Soybeans were mixed on bull spreading. Unknown destinations bought 124,000 tons of 2022/23 U.S. soybeans, the second day in a row with an announced sale, and soybean meal was up from the recent lows. There’s a chance for improved rainfall in Argentina and southern Brazil later this month, while conditions in the rest of Brazil, for now, are nearly ideal. There was also position squaring ahead of the slew of reports out Thursday, including CONAB’s updated outlook for Brazil’s crops and the USDA’s weekly export sales numbers. Soybean oil was up on oversold signals and solid demand, while bean oil was down on profit taking. ANEC expects Brazil to export 2 million tons of soybeans in January, with a large portion of that to China.

Corn was mixed, adjusting spreads. Corn is watching weather in South America, with potential improvements in rain possibly too late for Argentina. The big test for South America will be how Brazil’s second crop performs. That crop isn’t planted until soybeans are harvested, but expectations are for it to be large enough to offset anticipated losses in Argentina. ANEC sees Brazil’s corn exports for January at 5 million tons. Among the several big USDA reports out Thursday are the preliminary 2022 U.S. corn and soybean production totals and quarterly stocks data. The U.S. Energy Information Administration says ethanol production last week averaged 943,000 barrels a day, up 99,000 on the week, but down 63,000 on the year, with a domestic supply of 23.8 million barrels, 644,000 below the prior week, but 889,0002 above last year. China says it is extending its tariffs on U.S. DDGS imports for another five years.

The wheat complex was higher on short covering and technical buying. Most of the spotlight for wheat Thursday will fall on the international portion of the supply and demand report, with many analysts expecting increases for the crops in Australia and Russia. The USDA will also issue winter wheat planted area numbers Thursday, along with the preliminary 2022 spring wheat production total. Export demand for U.S. wheat remains slow, with Russia holding most of the market share due to holding the current lowest price in the world. Egypt reportedly bought 60,000 tons of wheat from Russia. The ongoing war between Russia and Ukraine continues to apparently hurt Ukraine more than Russia. Early expectations are for higher spring wheat planted area this year in Canada.