Market News

Soybeans, corn give back recent gains

Soybeans were lower on profit taking and technical selling, with the most active months still seeing a firm weekly gain. Forecasts remain dry for parts of South America, but crops are in generally good shape right now, with adequate soil moisture in most of Argentina and Brazil. Soybean meal fell sharply on the reality of the weather situation in South America and bean oil was lower on the bearishness in the soy complex. U.S. export sales were a marketing year low at 17.8 million bushels, with China and South Africa topping the list against a significant cancelation by unknown destinations. While November’s bean crush was record large for the month, that was largely factored in. The USDA’s attaché in Malaysia sees 2024/25 palm oil production at 19.2 million tons, slightly lower than the last guess due to weather issues impacting yield, with exports also down from the previous projection because of the high price relative to other vegetable oils. India’s palm oil imports for December were a nine-month low because of that price differential.

Corn was lower on profit taking and technical selling, pulling contracts to weekly losses. Corn is monitoring South America, with traders removing some of the recent weather risk premium. Extended forecasts are a little less certain and it’s too early to tell if this warmer, drier pattern in parts of Argentina and southern Brazil is going to trim top end yields. The big test for Brazil isn’t the first crop, but the second crop, which is planted after soybeans are harvested. The USDA’s next round of supply, demand, and production numbers is out January 10^th, with CONAB’s updated outlook for Brazil out on the 14^th. Demand is solid, but the supply side of the market is bearish. Export sales were sharply lower, not a surprise since it was the week of Christmas, at 30.6 million bushels. The leading buyers were Mexico and Japan.

The wheat complex was lower on fund and technical selling, cementing a lower weekly finish. A winter storm in parts of the U.S. Plains and Midwest was expected to benefit soil moisture in many areas. The snow and rain in many areas of the winter wheat regions is expected to be followed by an extended period of bitterly cold temperatures and that ice and snow would help to insulate the crop somewhat. Wheat conditions in the Black Sea region are mixed, largely favorable for Ukraine, but poor in much of southern Russia. U.S. exports continue to reflect the impact of competing origins, largely because of the strength of the dollar relative to other currencies. Export sales last week fell to a marketing year low of 5.2 million bushels, with South Korea and Thailand taking the top slots.