Market News

Soybeans, corn down ahead of USDA, CONAB numbers

Soybeans were lower on fund and technical selling. There has been better than expected rain in Argentina this week, with more in the forecast over the next couple of weeks. If the rainfall meets or exceeds expectations, that should help limit further declines in condition ratings during key stages of development. Brazil’s harvest is ongoing, as is their control of the export market, which should be reflected in the weekly U.S. sales numbers out Thursday morning. Estimates for Brazil crop have drifted lower since the initial projections because of weather issues, but it’s still expected to be a relatively large crop and should allow Brazil to maintain that control over the export market for the next few months. Soybean meal futures were lower, pressured by that rain in Argentina, the world’s leading exporter of soybean products. Soybean oil was higher, supported by demand expectations tied to biofuels.

Corn was modestly lower on fund and technical selling. Corn is watching development weather in Argentina and second crop planting in Brazil. The USDA and CONAB will release updated production projections Thursday. The U.S. Energy Information Administration says ethanol production last week averaged 1.033 million barrels a day, up 42,000 on the week and 33,000 on the year, with stocks of 24.779 million barrels, an increase of 509,000 from the previous week and 362,000 from a year ago. The Renewable Fuels Association says December ethanol exports of 155.6 million gallons, up 34% from November, mainly to Canada, the United Kingdom, India, the European Union, and the United Arab Emirates, while DDGS exports were a three-month high at 992,827 tons, 20% larger than the previous month, primarily to South Korea, Mexico, and Indonesia. The RFA says 2023 ethanol exports were 1.43 billion gallons, the third largest annual volume on record, while total DDGS exports were 10.8 million tons, down 1% on the year.

The wheat complex was mixed. Wheat consolidated ahead of the USDA numbers and another round of precipitation later this week in the Plains and Midwest. For those reports, not much of a change is expected on the U.S. side of the ledger and export sales should continue to reflect the overall slow global demand for U.S. wheat. There is also the possibility of China canceling on previously purchased U.S. soft red winter in favor of other less expensive origins. Russia’s prices have moved lower over the past few days, adding to their leverage over world wheat business. Weather-wise, the 2024 U.S. winter wheat crop is set to emerge from dormancy in significantly better condition than in 2023 thanks to improved precipitation in many key growing areas. Still, the recent rise in temperatures across much of the U.S. has melted snow cover, which could lead to winterkill if a possible cold snap later this month comes to fruition. Statistics Canada will release their December 31^st, 2023 stocks estimates Thursday.