Market News

Corn gives back some gains, soybeans finish mixed

Soybeans were mixed, consolidating, with most contracts unable to follow through on the early gains. Domestic demand for soybeans and products continues to be strong, but there are uncertainties about sustained demand from China. That’s due to political tensions with the U.S. and China’s zero-COVID policy. The USDA’s weekly export sales numbers are out Thursday at 8:30 Eastern/7:30 Central. Most forecasts have harvest delaying rain in some key U.S. growing areas into the weekend. In South America, planting has been aided by recent rainfall in Argentina and southern Brazil, but producers are bracing for a drier near-term weather pattern, especially in Argentina. Brazilian firm IMEA says production costs are up sharply in the state of Mato Grosso, with some crush operations possibly shifting to “maintenance mode” because of tighter crush margins. Soybean meal was lower and bean oil was higher, adjusting product spreads. Bean oil had additional support from the gains in crude oil.

Corn was modestly lower on profit taking and technical selling. U.S. harvest activity is ongoing with minor delays in parts of the region and while recent rain in the U.S. should help Mississippi River levels, more is needed. Corn is also monitoring planting in Argentina and Brazil, in addition to the export pace out of Ukraine. Those have all been key export competitors, with the U.S. losing market share due to relatively high prices, boosted by the dollar. Still, the dollar has seen some weakness recently and spent part of Wednesday session near technical support levels. Brazilian grain export group ANEC sees October corn exports for that nation at 6.5 million tons, which would be considerably larger than last year. Updated USDA supply, demand, and production numbers and new projections for Brazil from CONAB are all out November 9th. Ethanol production was up for the fourth week in a row, averaging 1.033 million barrels a day, up 17,000 on the week, but down 73,000 on the year due to demand and transportation uncertainties. The domestic supply was reported at 22.291 million barrels, an increase of 447,000 from the previous week and 2.366 million from a year ago.

The wheat complex was with Chicago and Kansas City up on the lower dollar and Minneapolis down on technical selling. There’s more rain in the forecast for the southern Plains, which could hit some of the drier areas. Long-term outlooks for the region generally show expanding drought conditions, which would impact hard red winter when it emerges from dormancy next spring. Conditions overall are better for soft red winter, but part of that region is experiencing drought conditions as well. Globally, the big question mark continues to be the Black Sea region. Negotiations are ongoing to extend Ukraine’s Black Sea export corridor past November 22nd, but Russia is pushing for concessions and reportedly slowing down inspections of Ukrainian vessels. There is chatter Moscow plans to steal nearly 2 million tons of grain from occupied areas of Ukraine, on top of what has already been stolen or destroyed. The Rosario Grain Exchange estimates Argentina’s 2022/23 wheat crop at 13.7 million tons, 1.3 million less than last week’s guess due to drought, with the exchange projecting abandonment of 9.2% of planted area. The trade is also monitoring the potential for heavy rainfall in eastern Australia ahead of widespread harvest.

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