Market News

Soybeans, corn up, watching South America

Soybeans were modestly higher on commercial and technical buying. No new export sales to China again Tuesday, but the trade remains optimistic. Much of the recent talk has centered around the Pacific Northwest, with smaller amounts out of the U.S. Gulf. Ahead of this resumption of trade, rumors were for sales of 5 million to 8 million tons. While sales have not met expectations, yet, it can take time to put together sales of that size, especially while trade negotiations are ongoing. Beans are watching the impact of recent heavy rain in Argentina and dry conditions in parts of Brazil. Many longer-term weather outlooks are less threatening for those key export competitors. Soybean meal and oil followed beans higher.

Corn was modestly higher on commercial and technical buying. China could be in the market for U.S. corn, but maybe not until after the first of the year. Beijing is also reportedly interested in U.S. ethanol, DDGS, and sorghum. Export demand has been a solid supportive factor during the first quarter of the marketing year and a trade deal with China, along with the implementation of the USMCA, would be a further positive. Corn is also watching conditions in Argentina and Brazil, especially the impact on planting and possible replanting. Ethanol futures were steady to firm. The U.S. Energy Information Administration’s weekly ethanol numbers are out Wednesday. The industry is concerned about margins but could be helped out by year-round E15 use and the resumption of business with China.

The wheat complex was lower on profit taking and technical selling, in generally quiet pre-holiday trade. There are a few factors that could increase export demand for U.S. wheat, including winterkill in the Black Sea region, wet weather in Argentina, and generally poor conditions for Australia, but for now, the pace remains bearish just over halfway through the marketing year. Russia could limit wheat exports later this week. Japan issued its routine weekly tender for 106,100 tons of food wheat. While there has been talk about China buying U.S. wheat, nothing’s surfaced, and China holds about half of the global wheat reserve. New supply and demand estimates are out January 11th, along with winter wheat acreage and the final 2018 U.S. corn and soybean production totals.