Market News

Corn mostly firm ahead of USDA harvest update

Soybeans were lower on fund and technical selling. China wants the U.S. to roll back tariffs before signing phase one of the proposed trade deal but continues to show solid demand for U.S. beans and was the top recipient in the USDA’s export inspections report. Monday, President Trump told reporters that “China wants to make a deal”, but didn’t offer specifics about a timeline for face-to-face, high-level negotiations. Conditions in Brazil look good, while Argentina has turned drier, but with moderate temperatures, which is expected to limit stress. Agro Consult has Brazil’s soybean crop at 124 million tons. Stateside, as of Sunday and after the weekend snow, rain, and high winds, the USDA reports 96% of U.S. soybeans are harvested, compared to the five-year average of 99%. Soybean meal was mixed, consolidating, and bean oil was lower, following beans. The USDA says the soybean crush during October was 187 million bushels, up 25 million from September and 3 million from October 2019.

Corn was mostly modestly higher. Heavy weekend snow in parts of the upper Midwest and Plains will further delay the tail end of this year’s harvest, harm quality, and lead to increased dry down costs. Forecasts this week are dry in many areas, but light snow is still probable in northern portions of the region. Corn is also watching weather in South America, expecting a very large second crop for Brazil. Ag Resource has total production for Brazil at 102.4 million tons and reports 54% of Argentina’s crop is in good to excellent condition. President Trump says he will bring back steel and aluminum tariffs on Argentina that were repealed in 2018, citing currency manipulation by both nations, part of which has driven the increases in corn exports. Ukraine has also been a major export competitor. The USDA says 89% of U.S. corn is harvested, compared to 98% on average. Weekly export inspections for corn were bearish, primarily to Mexico, but sorghum was bullish, mostly headed to China. Ethanol futures were mostly weak. The USDA says corn for fuel alcohol use during October was 437 million bushels, up 8% on the month, but down 5% on the year.

The wheat complex was lower on fund and technical selling. Export demand has been good, but has slowed down as U.S. prices have risen, with another bearish week for inspections, even as prices in France and the Black Sea region have also moved higher. Wet weather has limited planting in France and the United Kingdom, while the rally in Russia has been driven by domestic and export demand, with the crop in good shape. Argentina will also have a smaller crop, but that’s canceled out by other countries. The losses in Australia will also be made up by other exporters, with Australia’s Bureau of Agricultural and Resource Economics and Sciences cutting its outlook to 15.85 million tons, 35% below the five-year average. The USDA’s next set of supply, demand, and production estimates is out December 10^th. According to the USDA, winter wheat has fully emerged and no weekly condition rating was given. Egypt’s Ag Ministry says it has storage capacity for 4 million tons of wheat.