Market News

Soybean meal pulls soybeans, corn higher

Soybeans were sharply higher on commercial and technical buying, along with strength in soybean meal, cementing a sharply higher weekly finish. Some medium-term forecasts did have rain in dry parts of South America, but near-term outlooks generally remain dry. More early harvest delays are probable in northern Brazil. That might have sparked some new export interest from China, which had purchased soybeans from Brazil for January delivery anticipating an early harvest. Brazil’s export body ANEC estimates January sales at 3.375 million tons. Unknown destinations bought 120,000 tons of 2022/23 U.S. beans Friday morning, bringing the announced total for the week to 252,000 tons. Bean meal hit new highs on strong commercial demand, while bean oil was modestly lower on product spread adjustments. There’s talk India, the world’s biggest buyer of vegetable oils, might slash palm oil imports due to high prices.

Corn was modestly higher on commercial and technical buying, in addition to the higher moves in beans and bean meal, ending the first week of 2022 with solid gains. Corn was also watching development conditions in Argentina and southern Brazil, which have lowered condition ratings and yield potential. CONAB’s updated outlook for Brazil is out Tuesday, January 11^th, while the new USDA estimates are out Wednesday, January 12^th. The preliminary 2021 U.S. corn and soybean production totals are also out Wednesday. Friday morning, Mexico picked up 176,784 tons of 2021/22 U.S. corn, putting the reported total for the week at 278,784 tons. Ethanol futures were unchanged.

The wheat complex was mixed, with Chicago and Kansas City up on oversold signals, while Minneapolis was mixed on bear spreading. Still, the slow export demand, light rain in parts of the Southern U.S. Plains, and some technical factors pushed the most active months at the three U.S. pits to sharp weekly losses. Weather continues to be an issue in some U.S. winter wheat growing areas, but most analysts are expecting the USDA to report higher than a year ago acreage on the 12^th. The trade will also be watching the supply and demand numbers closely, with the USDA expected to raise production projections for Argentina and Australia. The Buenos Aires Grain Exchange raised its outlook for Argentina to a record 21.8 million tons. Additionally, many continue to monitor overwintering conditions in and tensions between Russia and Ukraine. The recent decline in U.S. prices has helped U.S. wheat be more competitive on the export market, but overall demand is still slow. The USDA’s attaché in Turkey says Ankara will continue to their zero-tariff import policy for a number of key commodities, including wheat and corn, through the end of the year.