Market News

Soybeans, corn start year with modest gains

Soybeans were modestly higher on short covering and technical buying. Crop conditions in most of Brazil remain generally favorable, but southern areas and parts of Argentina could see a drier pattern soon. That also supported meal, as Argentina is the world’s leading exporter of that product. Bean oil was weak after failing to break through technical resistance. Still, the market hasn’t added all that much weather premium because that pattern hasn’t materialized yet and these gains could be easily stripped away if forecasts change. The USDA’s updated supply, demand, and production numbers are out on the 10th, with CONAB’s new projections for Brazil on the 14th. The USDA says 210 million bushels of beans were crushed during November 2024, falling 6 million from October’s all-time high, but rising 10 million from November 2023. Meal and oil stocks were above a year ago due to the year-to-year increase in production. China’s government says bean and meal stocks at ports were both up on the week.

Corn was modestly higher on short covering and technical buying. Corn is watching conditions in South America, with about a fifth of Argentina’s crop pollinating. The bigger test for South American corn production is Brazil’s second crop, which is planted after soybeans are harvested. The U.S. Energy Information Administration says ethanol production was up on the week, despite the decline in margins. Production averaged 1.111 million barrels per day, an increase of 4,000 on the week and 62,000 on the year, while stocks hit a multi-month high at 23.639 million barrels, 565,000 above the prior week and 60,000 above last year, and exports averaged 99,000 barrels a day, 67,000 less than the week before, but 30,000 more than the prior year. For November 2024, 464.938 million bushels of corn were used for ethanol production, a decrease of less than 1% from October, but an increase of 2% from November 2023, with DDGS production of 1,836,244 tons, down 2% on the month, but up 2% on the year.

The wheat complex was lower on profit taking and technical selling, along with the higher trade in the dollar index during the session. The trade’s monitoring harvest activity in the southern hemisphere and Russia’s exports. Harvest is moving forward for both Argentina and Australia, with production expected to be above year ago levels. Moscow’s cap on wheat exports and higher tariffs won’t officially go into effect until February, but there are some signs of a slowdown ahead of the start of the second half of their marketing year. The USDA’s weekly U.S. sales numbers are out Friday morning. A winter storm bringing bitterly cold temperatures to portions of the U.S. Plains and Midwest could impact crop conditions in areas with little to no snow cover. That said – wheat is a very resilient crop and conditions when the crop breaks dormancy are far more important than conditions during dormancy.

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